THIRD DIVISION
RODZSSEN SUPPLY CO. INC., petitioner, vs. FAR EAST BANK & TRUST CO., respondent.
D E C I S I O N
PANGANIBAN, J.:
When both parties to a transaction are mutually negligent in the performance of their obligations, the fault of one cancels the negligence of the other. Thus, their rights and obligations may be determined equitably. No one shall enrich oneself at the expense of another.
The Case
Before us is a Petition for Review on Certiorari[i][1] under Rule 45 of the Rules of Court, assailing the January 21, 1993 Decision[ii][2] of the Court of Appeals[iii][3] (CA) in CA-GR CV No. 26045. The challenged Decision affirmed with modification the ruling of the Regional Trial Court of Bacolod City in Civil Case No. 2296. The CA ruled as follows:
“WHEREFORE, the decision under appeal should be, as it is hereby affirmed in all its aspects, except for the deletion of paragraph 2 of its dispositive portion, which paragraph shall be replaced by a new paragraph which shall read as follows:
‘2. ordering the defendant to pay the plaintiff the sum equivalent to 10% of the total amount due and collectible, as attorney’s fees; and’
On the other hand, the trial court had rendered this judgment:
“1. Ordering the defendant to pay the plaintiff the sum of P76,000.00, representing the principal amount being claimed in this action, plus interest thereon at the rate of 12% per annum counted from October 1979 until fully paid;
“2. Ordering the defendant to pay the plaintiff the sum equivalent to 25% of the total amount due and collectible; and
The Facts
The factual and procedural antecedents of the case are summarized by the Court of Appeals as follows:
“In the complaint from which the present proceedings originated, it is alleged that on January 15, 1979, defendant Rodzssen Supply, Inc. opened with plaintiff Far East Bank and Trust Co. a 30-day domestic letter of credit, LC No. 52/0428/79-D, in the amount of P190,000.00 in favor of Ekman and Company, Inc. (Ekman) for the purchase from the latter of five units of hydraulic loaders, to expire on February 15, 1979; that subsequent amendments extended the validity of said LC up to October 16, 1979; that on March 16, 1979, three units of the hydraulic loaders were delivered to defendant for which plaintiff on March 26, 1979, paid Ekman the sum of P114,000.00, which amount defendant paid plaintiff before the expiry date of the LC; that the shipment of the remaining two units of hydraulic loaders valued at P76,000.00 sent by Ekman was ‘readily received by the defendant’ before the expiry date [of] subject LC; that upon Ekman’s presentation of the documents for the P76,000.00 ‘representing final negotiation’ on the LC before the expiry date, and ‘after a series of negotiations’, plaintiff paid to Ekman the amount of P76,000.00; and that upon plaintiff’s demand on defendant to pay for said amount (P76,000.00), defendant’ refused to pay ... without any valid reason’. Plaintiff prays for judgment ordering defendant to pay the abovementioned P76,000.00 plus due interest thereon, plus 25% of the amount of the award as attorney’s fees.
“In the Answer, defendant interposed, inter alia, by way of special and affirmative defenses that plaintiff ha[d] no cause of action against defendant; that there was a breach of contract by plaintiff who in bad faith paid Ekman, knowing that the two units of hydraulic loaders had been delivered to defendant after the expiry date of subject LC; and that in view of the breach of contract, defendant offered to return to plaintiff the two units of hydraulic loaders, ‘presently still with the defendant’ but plaintiff refused to take possession thereof.
“The trial court’s ruling that plaintiff [was] entitled to recover from defendant the amount of P76,000.00 was based on its following findings/conclusions: (1) under the contract of sale of the five loaders between Ekman and defendant, upon Ekman’s delivery to, and acceptance by, defendant of the two remaining units of the five loaders, defendant became liable to Ekman for the payment of said two units. However, as defendant did not pay Ekman, the latter pressed plaintiff for the payment of said two loaders in the amount of P76,000.00. In the honest belief that it was still under obligation to Ekman for said amount, considering that Ekman had presented all the necessary documents, plaintiff voluntarily paid the said amount to Ekman. Plaintiff’s x x x voluntary and lawful act of payment g[a]ve rise to a quasi-contract between plaintiff and defendant; and if defendant should escape liability for said amount, the result would be to allow defendant to enrich itself at plaintiff’s expense x x x.
“x x x. While defendant, indeed offered to return the two loaders to plaintiff, x x x this offer was made 3 years after defendant’s receipt of the goods, when plaintiff pressed for payment. By said voluntary acceptance of the two loaders, estoppel works against defendant who should have refused delivery of, and/or immediately offered to return, the goods.
“Accordingly, judgment was rendered in favor of the plaintiff and against the defendant x x x.”[vi][6]
The CA Ruling
The CA rejected petitioner’s imputation of bad faith and negligence to respondent bank for paying for the two hydraulic loaders, which had been delivered after the expiration of the subject letter of credit. The appellate court pointed out that petitioner received the equipment after the letter of credit had expired. “To absolve defendant from liability for the price of the same,” the CA explained, “is to allow it to get away with its unjust enrichment at the expense of the plaintiff.”
Issues
Petitioner presents the following issues for resolution:
“1. Whether or not it is proper for a banking institution to pay a letter of credit which has long expired or been cancelled.
“2. Whether or not respondent courts were correct in their conclusion that there was a consummated sale between petitioner and Ekman Co.
“3. Whether or not Respondent Court of Appeals was correct in evading the issues raised in the appeal that under the trust receipt, petitioner was merely the depositary of private respondent with respect to the goods covered by the trust receipt.”[viii][8]
The Court’s Ruling
We affirm the Court of Appeals, but lower the interest rate to only 6 percent and delete the award of attorney’s fees.
First Issue:
Efficacy of Letter of Credit
Petitioner asserts that respondent bank was negligent in paying for the two hydraulic loaders, when it no longer had any obligation to do so in view of the expiration and cancellation of the Letter of Credit.
Petitioner Rodzssen Supply Inc. applied for and obtained an irrevocable 30-day domestic Letter of Credit from Far East Bank and Trust Company Inc. on January 15, 1979, in favor of Ekman and Company Inc., in order to finance the purchase of five units of hydraulic loaders in the amount of P190,000. Originally set to expire on February 15, 1979, the subject Letter of Credit was amended several times to extend its validity until October 16, 1979.
The Letter of Credit expressly restricted the negotiation to respondent bank and specifically instructed Ekman and Company Inc. to tender the following documents: (1) delivery receipt duly acknowledged by the buyer, (2) accepted draft, and (3) duly signed commercial invoices. Likewise, the instrument contained a provision with regard to its expiration date.[ix][9]
For the first three hydraulic loaders that were delivered, the bank paid the amount specified in the letter of credit. The present dispute pertains only to the last two hydraulic loaders.
Clearly, the bank paid Ekman when the former was no longer bound to do so under the subject Letter of Credit. The records show that respondent paid the latter P76,000 for the last two hydraulic loaders on March 14, 1980,[x][10] five months after the expiration of the Letter of Credit on October 16, 1979.[xi][11] In fact, on December 27, 1979, the bank had informed Rodzssen of the cancellation of the commercial paper and credited P22,800 to the account of the latter. The amount represented the marginal deposit, which petitioner had been required to put up for the unnegotiated portion of the Letter of Credit -- P76,000 for the two hydraulic loaders.[xii][12]
The subject Letter of Credit had become invalid upon the lapse of the period fixed therein.[xiii][13] Thus, respondent should not have paid Ekman; it was not obliged to do so. In the same vein, of no moment was Ekman’s presentation, within the prescribed period, of all the documents necessary for collection, as the Letter of Credit had already expired and had in fact been cancelled.
Second Issue:
Was Petitioner Liable to Respondent?
Be that as it may, we agree with the CA that petitioner should pay respondent bank the amount the latter expended for the equipment belatedly delivered by Ekman and voluntarily received and kept by petitioner.
Respondent bank’s right to seek recovery from petitioner is anchored, not upon the inefficacious Letter of Credit, but on Article 2142 of the Civil Code which reads as follows:
“Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.”
Indeed, equitable considerations behoove us to allow recovery by respondent. True, it erred in paying Ekman, but petitioner itself was not without fault in the transaction. It must be noted that the latter had voluntarily received and kept the loaders since October 1979.
Petitioner claims that it accepted the late delivery of the equipment, only because it was bound to accept it under the company’s trust receipt arrangement with respondent bank.
Granting that petitioner was bound under such arrangement to accept the late delivery of the equipment, we note its unexplained inaction for almost four years with regard to the status of the ownership or possession of the loaders. Bewildering was its lack of action to validate the ownership and possession of the loaders, as well as its stolidity over the purported failed sales transaction. Significant too is the fact that it formalized its offer to return the two pieces of equipment only after respondent’s demand for payment, which came more than three years after it accepted delivery.
When both parties to a transaction are mutually negligent in the performance of their obligations, the fault of one cancels the negligence of the other and, as in this case, their rights and obligations may be determined equitably under the law proscribing unjust enrichment.
Payment of Interest
We, however, disagree with both the CA and the trial court’s imposition of 12 percent interest on the sum to be paid by petitioner. In Eastern Shipping Lines v. CA,[xiv][14] the Court laid down the following guidelines in the imposition of interest:
“x x x x x x x x x
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.”
Although the sum of money involved in this case was payable to a bank, the present factual milieu clearly shows that it was not a loan or forbearance of money. Thus, pursuant to established jurisprudence and Article 2009 of the Civil Code, petitioner is bound to pay interest at 6 percent per annum, computed from April 7, 1983, the time respondent bank demanded payment from petitioner. From the finality of the judgment until its satisfaction, the interest shall be 12 percent per annum.
Attorney’s Fees
Considering that negligence is imputable to both parties, both should bear their respective costs of the suit. We also delete the award of attorney’s fees in favor of respondent bank.[xv][15]
WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED with the following MODIFICATIONS:
1. Petitioner Rodzssen Supply Co., Inc. is ORDERED to reimburse Respondent Far East Bank and Trust Co., Inc. P76,000 plus interest thereon at the rate of 6 percent per annum computed from April 7, 1983. After this judgment becomes final, the interest shall be 12 percent per annum.
2. The award of attorney’s fees in favor of respondent is DELETED.
3. No pronouncement as to costs.
SO ORDERED.
Melo (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.
T
HIRD DIVISION
BAYNE ADJUSTERS AND SURVEYORS, INC., petitioner, vs. COURT OF APPEALS and INSURANCE COMPANY OF NORTH AMERICA, respondents.
D E C I S I O N
GONZAGA-REYES, J.:
This petition for review on certiorari seeks a re-examination of the conclusions reached both by the trial court and of the appellate court from the evidence on record finding petitioner Bayne Adjusters and Surveyors Inc., liable for damages in the amount of P811,609.53 for the alkyl benzene lost due to spillage while the said liquid cargo was being pumped into the shore storage tanks of the consignee Colgate Palmolive Philippines, Inc., under the supervision of herein petitioner.
In May 1987 Colgate Palmolive Philippine, Inc., imported alkyl benzene from Japan valued at US$255,802.88. The said liquid cargo was insured with herein private respondent Insurance Company of North America against all risk for its full value. Herein petitioner Bayne Adjusters and Surveyors Inc., was contracted by the consignee to supervise the proper handling and discharge of the cargo from the chemical tanker to a receiving barge until the cargo is pumped into the consignee’s shore tank. When the cargo arrived in Manila petitioner’s surveyor supervised the transfer of the cargo from the chemical tanker to the receiving barge. Pumping operation from the barge to the consignee’s shore tank commenced at 2020 hours of June 27, 1987. Pumping of the liquid cargo from the barge to the consignee’s tank was interrupted several times due to mechanical problems with the pump. When the pump broke down once again at about 1300 hours of June 29, 1987, the petitioner’s surveyor left the premises without leaving any instruction with the barge foreman what to do in the event that the pump becomes operational again. No other surveyor was left in the premises and the assigned surveyor did not seal the valves leading to the tank to avoid unsupervised pumping of the cargo. Later that day, the consignee asked the petitioner to send a surveyor to conduct tank sounding. Petitioner sent Amado Fontillas, a cargo surveyor, not a liquid bulk surveyor, to the premises and it was agreed that pumping operation would resume the following day at 1030 hours. Fontillas tried to inform both the barge men and the assigned surveyor of the scheduled resumption of pumping operation but he could not find them so he left the premises. When the barge men arrived in the early evening , they found the valves of the tank open and resumed pumping operation in the absence of any instruction from the surveyor to the contrary. The following morning it was found that an undetermined amount of alkyl benzene was lost due to overflow. The consignee filed a claim with the private respondent insurance corporation for the value of the lost liquid cargo. A conference attended by representatives of the petitioner, the consignee and of the Claimsmen Adjustment Corporation, represented by marine surveyor, was held to determine the amount of alkyl benzene lost in the overflow and the net amount payable by the insurance. A compromise quantity of 67.649MT of alkyl benzene was agreed to have been lost in the overflow and respondent insurance corporation agreed to pay the consignee the net amount of P811,609.53. Private respondent instituted this action for collection of sum of money as subrogee of the consignee after failure to extrajudicially settle the matter with Bayne Adjusters.
Both the trial court and the appellate court found the petitioner’s failure to comply with the Standard Operating Procedure for Handling Liquid Bulk Cargo when pumping operation is suspended as the proximate cause of the loss. It is not denied by the petitioner’s surveyor that he did not close the valve of the tank when the pumping operations were suspended due to pump break down, as required by standard procedure. This enabled the barge men, in the absence of any instruction to the contrary, to resume pumping operations without supervision and consequently, caused the overflow of the liquid cargo from the tank.
Petitioner denies the finding of negligence. It is contended that negligence in this case cannot be presumed and no sufficient evidence was presented by the plaintiff that the loss suffered by the consignee is due to the negligence of the petitioner. The petitioner argues that it is not bound to guard the cargo at all times and its only duty is to supervise the transfer of the liquid cargo from the chemical tanker to the barge and from the barge to the shore tank of the consignee. The petitioner cites the private respondent’s own witness who stated in court that the operator of the barge pump continued pumping into the consignee’s shore tank without authorization from the petitioner’s surveyor and that the overflow was caused by this unauthorized pumping operation. Petitioner also raised in issue that both the trial and the appellate court gave undue weight to the testimony of the private respondents supposed expert witness who admitted in court that he made a mistake in his affidavit that the petitioner is liable under a protective survey contract when in fact the agreement between the petitioner and the consignee is that of a superintendent survey. The petitioner argues that following the statement of the private respondent’s witness that the agreement between the consignee and the petitioner is that of a protective survey agreement, the standard operating procedure for handling liquid bulk cargo should not be the criterion for the evaluation of the alleged negligence of the petitioner.
The private respondent filed comment to the petition stating that the petition is asking this Court to review the findings of facts and findings as to the credibility of witnesses made by both the trial and appellate court which under settled jurisprudence is conclusive upon the Supreme Court and in the absence of a showing that any of the exceptions to this rule is applicable the petition should be dismissed. On the merits, the private respondent prays for the affirmance in toto of the findings of the trial and appellate courts. The testimony of the expert witness presented by the private respondent is not based on hearsay evidence but from his personal investigation of the incident and his conclusion that the petitioner’s surveyors are at fault is based on his experience as a marine cargo surveyor for eight years. The expert witness found that the petitioner’s surveyors failed to perform what is required of them under the standard operating procedure for marine surveyors[1][1] when pumping operation is suspended, i.e, to seal all cargo manhole covers including the barge and shore manifolds. Their negligence to do so paved the way for the barge operators to resume pumping operations without expert supervision which should have been provided by the petitioner’s surveyors. Further, petitioner’s own report admits that it is bound to the consignee under a superintendent contract of survey which includes the supervision in the discharge of cargo to prevent loss.
A Reply was filed by the petitioner stating that it is not seeking a review of the facts in evidence but a review of the conclusions reached by the trial and the appellate court based on the facts in evidence and adopts the arguments raised in the main petition.
Private respondent filed Rejoinder stressing that a re-examination of the factual findings of the lower courts is not in order as none of the exceptions to the rule was shown by the petitioner to be obtaining in this case. The supposed mistake committed by the respondent’s expert witness was sufficiently explained in court and that by itself is not sufficient to overthrow the said witness’ credibility nor the weight accorded to it by the lower courts.
We find no reversible error committed by the appellate court.
The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands.[2][2] The factual findings and conclusions of the trial and appellate court when supported by substantial evidence are entitled to great respect and will not be disturbed on appeal except on very strong and cogent grounds.[3][3]
Both parties agree that the petitioner is bound to supervise the proper discharge of the liquid cargo from the chemical tanker to the receiving barge and from the latter to the consignee’s shore tank. Petitioner does not deny that when pumping operations were suspended due to mechanical problems with the barge pump, that the assigned surveyor left the premises without closing the valves and the manifold, and worse failed to instruct the barge foreman to resume discharge of the cargo only at a specified time when the petitioner’s surveyor will again be present. Thus, when the pump became operational again and the tank was left open by the petitioner’s surveyors the barge pump operators, without instruction to the contrary, assumed that they may resume discharge of the cargo. It was during the unsupervised discharge of the cargo that the spillage occurred.
Based on the undisputed facts, we find that the lower courts did not err in holding the petitioner liable for the loss incurred by the consignee for its failure to exercise due diligence as required by the circumstances which in this case is governed by the Surveyor’s Standard Operating Procedure in Handling Liquid Bulk Survey when pumping operation is suspended. We note that the existence and binding effect of the standard procedure in marine survey of liquid cargo under Exh Q is not denied by the petitioner. Paragraph 2.2 of the Surveyor’s Standard Operating Procedure when pumping operation is suspended states:
2.2.1 If consignee desires to temporarily suspend the pumping operation, take final reading of the shore tanks.
2.2.2 Seal all cargo compartment manhole covers and sounding pipe covers of the barge.
2.2.3 Seal the barge manifold and shore manifold.
2.2.4 The surveyor should take sounding of the remaining quantity left on barge prior to closing/sealing of its covers to counter check the quantity partially received by the shore tanks.
It is clear that under the standard procedure the surveyor is required to seal all cargo compartment manhole covers and the barge and manifold covers to avoid unsupervised discharge of the liquid cargo and to avert loss or contamination thereof. Although the cessation of the pumping operations in this case was not voluntarily requested by the consignee, but was due to mechanical problems with the pump, there is greater reason to comply with the above quoted standard procedure. The recurring pump break down should have warned the petitioner’s assigned surveyor of the need to exercise extreme caution and closer supervision to safeguard the proper discharge of the cargo as the pump break down hindered normal pumping operations. Instead the petitioner’s assigned surveyor disregarded the standard procedure and left the pump site without leaving any instruction or directive with the barge pump operators; this paved the way for the barge pump operator’s discharge of the cargo without expert supervision. The petitioner’s failure to closely supervise the discharge of the cargo in accordance with accepted guidelines is the proximate cause of the loss. We find no cogent reason to overturn the legal conclusion reached by the lower courts that the petitioner is negligent in the performance of its duty as a marine superintendent surveyor under the Standard Operating Procedure in handling liquid cargo and held the petitioner liable for damages for the loss of the cargo.
The petitioner relies on the erroneous statement made by the private respondent’s claims adjuster in his affidavit[4][4] that the parties are bound under a protective survey agreement to evade liability under the standard operating procedure and argues that the said standard procedure is not applicable to contracts of protective survey. We note that the adjuster’s error was immediately rectified in court during the witness’ testimony wherein he stated that the contract between the parties herein is for superintendent survey and that protective survey applies only to solid cargo, a fact not disputed by the petitioner. The petitioner is estopped from denying the existence of a superintendent survey agreement with the consignee since the final report it submitted to the consignee is entitled "Superintendence of discharge and Landed Weight Certificate" wherein petitioner stated that its surveyors superintended the discharge of the cargo from the tanker until the cargo was pumped into the consignee’s shore tank. Moreover, the applicability of the standard procedure required of the petitioner in this case cannot be seriously questioned as it is specifically entitled Standard Operating Procedure in Handling Liquid Bulk Survey and the cargo subject of this litigation is liquid alkyl benzene.
The other arguments raised by the petitioner regarding the credibility of the claims adjuster presented by the private respondent lose potency when examined under the overwhelming pronouncements of this Court that findings of the trial court on the credibility of witnesses is respected on appeal.[5][5] The testimony of the claims adjuster whether taken as expert opinion or not was properly given weight and credence by the lower courts as it is undisputed that the claims adjuster investigated the spillage of the liquid cargo with the consent of the petitioner, the private respondent and the consignee.[6][6]
WHEREFORE, the petition is dismissed for lack of merit.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.
[1][1] Exh. Q, Standard Operating Procedure in Handling Liquid Bulk Survey, pp. 165-169, OR.
[2][2] Arts. 1170, 1172-1173, Civil Code; Southern College Inc., vs. Court of Appeals, 292 SCRA 422.
[3][3] Philippine National Bank vs. Court of Appeals and Pujol, G.R. No. 126152, September 28, 1999.
[4][4] Exh. 1, p. 180 OR.
[5][5] People vs. Obello, 284 SCRA 79; People vs. Lising, 285 SCRA 595; People vs. Atop, 286 SCRA 157.
[6][6] Exh. O, p. 161, O.R.
THIRD DIVISION
GERMAN MARINE AGENCIES, INC. and LUBECA MARINE MANAGEMENT HK LTD., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and FROILAN S. DE LARA, respondents.
D E C I S I O N
GONZAGA-REYES, J.:
On 17 October 1994, private respondent was hired by petitioners to work as a radio officer on board its vessel, the M/V T.A. VOYAGER. Sometime in June, 1995, while the vessel was docked at the port of New Zealand, private respondent was taken ill. His worsening health condition was brought by his crewmates to the attention of the master of the vessel. However, instead of disembarking private respondent so that he may receive immediate medical attention at a hospital in New Zealand, the master of the vessel proceeded to Manila, a voyage of ten days, during which time the health of private respondent rapidly deteriorated. Upon arrival in Manila, private respondent was not immediately disembarked but was made to wait for several hours until a vacant slot in the Manila pier was available for the vessel to dock. Private respondent was confined in the Manila Doctors Hospital, wherein he was treated by a team of medical specialists from 24 June 1995 to 26 July 1995.
After private respondent was discharged from the hospital, he demanded from petitioners the payment of his disability benefits and the unpaid balance of his sickness wages, pursuant to the Standard Employment Contract of the parties. Having been assured by petitioners that all his benefits would be paid in time, private respondent waited for almost a year, to no avail. Eventually, petitioners told private respondent that, aside from the sickness wages that he had already received, no other compensation or benefit was forthcoming.[i][1] Private respondent filed a complaint with the National Labor Relations Commission (NLRC) for payment of disability benefits and the balance of his sickness wages. On 31 July 1997, the labor arbiter rendered a decision,[ii][2] the pertinent parts of which are quoted hereunder –
In the case at bar, there is no issue on the propriety or illegality of complainant’s discharge or release from employment as Radio Operator. What complainant is pursuing is limited to compensation benefits due a seaman pursuant to POEA Standard Employment Contract, Part II, Section C, paragraph 4(c) and paragraph 5, which reads:
“SECTION C. COMPENSATION BENEFIT
x x x
“4. The liabilities of the employer when the seaman suffers injury or illness during the term of his contract are as follows:
x x x
c. The employer shall pay the seaman his basic wages from the time he leaves the vessel for medical treatment. After discharge from the vessel, the seaman is entitled to one hundred percent (100%) of his basic wages until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but is [sic] no case shall this period exceed one hundred twenty (120) days. For this purpose, the seaman shall submit himself to a post-employment medical examination by the company-designated physician within three working days upon his return, except when he is physically incapacitated to do so, in which case the written notice to the agency within the same period is deemed as compliance x x x.
“5. In case of permanent total or partial disability of the seamen [sic] [during] the term of employment caused by either injury or illness, the seamen [sic] shall be compensated in accordance with the schedule of benefits enumerated in Appendix 1 of this Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time of [sic] the illness or disease was contracted.”
The aforecited provisions of the POEA Standards [sic] Employment Contract is clear and unmistakable that its literal meaning should be preserved.
Thus, the only question at which the liability of respondents is anchored is whether complainant was really fit to work in his position as radio operator. If this is so, it could mean that he is not entitled to disability compensation which respondents vigorously disputed, citing in support the certification made by Dra. Victoria Forendo [sic] Cayabyab, allegedly “the officially accredited and designated physician of respondents, which is likewise, accredited with the Philippine Overseas Employment Administration” where it is stated that “Nothing [sic] his job description as a radio operator, Mr. de Lara may be allowed to go back to work.” (Annex D & E). Complainant on the other hand disputes respondent’s above posture contending that the more persuasive and authentic evidence for purposes of deciding his fitness or lack of fitness to work is the certificate issued by Ms. Naneth [sic] Domingo-Reyes, MD, FPMA where it appears that after submitting himself to another medical examination by his attending physicians at the Manila Doctors Hospital on December 4, 1996, to verify possible mistake in his post treatment examination on March 25, 1996, firmly “was classified under partial permanent disability and is not fit to go back to his previous work due to mental state.” (Annex “C”, complainant’s reply to respondent’s position paper).
We have gone into a judicious study and analysis of the arguments and exhibits particularly the ones relied upon by the parties and find that of the complainant worthy of consideration. Looking closely at Annexes “D” and “E” of respondents’ position paper, there is hardly any clear affirmation that complainant was fully fit to resume his work as radio operator. Although the document alluded to, declares that complainant may be allowed to go back to work, the tenor of the same seems uncertain that complainant is fit to resume his work, and that assuming that such was the message, the words “may be” can not be taken as overriding that coming from the Manila Doctor Hospital which in the beginning handled the medical case of complainant and to which respondents unconditionally referred him and by reason of which six or seven medical especialists [sic] of the hospital took turn[s] studying and reviewing his uncertain ailment after release by respondents. Otherwise stated, unlike the message of annexes D to E of respondents, annex “C” of complainant is clear and unmistakable and confirm complainant’s partial permanent disability and his definite unfitness to go back to his previous work due to his mental health. Some pronouncements in this exhibit mentions also that when complainant was admitted an emerging basis for drowsiness, behavioral change and off and on fever” and different procedures were resorted along his case, like emergency CT scan on the brain and his admission in June 24, 1995 was catastropic, whereas, more could be said in three document[s] issued by Dra. Victoria Florendo Cayabyab.
Finally, respondents contend that the annexes issued by Dr. Domingo-Reyes of the Manila Doctors Hospital should not be given weight because it is not issued by the hospital or doctor duly accredited by the POEA. Neither would a close look on the applicable provision for seamen show – that a duly accredited hospital or doctor is needed for purposes of the grant of compensation benefits to a such [sic] or ailing seamen. We are more persuaded based on the arguments of the complainant among others, that it is absurd to require an ailing seaman in high seas or in a foreign land to still wait until the ship where he is working land in the country to secure treatment in a duly accredited hospital or doctor.
On the basis of the above therefore, and convinced that complainant’s “partial permanent disability” which was contracted in the course or on account of his employment as radio operator in foreign principal’s vessel, he is entitled to disability benefit in accordance with the schedule of benefits enumerated in Appendix 1 of the Contract, the maximum of which is US $50,000. But since the amount prayed for is US$25,000.00 which we presume has a more realistic basis, the same is hereby granted.
Concerning the sickness wage, respondents averred that the same had already been paid. However, there is no evidence that the same has been paid except the payment to the complainant of P49,546.00. Since complainant’s salary as US$870 and a seaman’s sick wage entitlement is fixed to a maximum of 120 days, his “sickness wages would rest to a total sum of US$3,480 or its peso equivalent. On this, complainant has been paid only [P]49,546.00 (US$1,943), thereby leaving for complainant a balance of US$1,537. Finally, it is also argued that as regards the balance, the same has been paid citing as proof the Sickness Release and Quitclaim signed by complainant (Annexes “C” & “C-1”). Complainant, on the other hand denied this, and contended that the quitclaim and release is invalid. Considering that there is no proof on record that this balance of US$1,537 was paid, unlike the P49,546.00, the same is granted.
WHEREFORE, premises above-considered, a decision is hereby issued ordering respondent German Marine Agencies Inc. to pay complainant the following sums:
(a) Disability benefit - - - - - - - - - - - - - - US$25,000.00
(b) Sickness wage balance - - - - - - - - - - US$1,137.00
all in the aggregate of Twenty Six Thousand One Hundred Thirty Seven Dollars (US$26,137.00) or its peso equivalent, the claim for damages being hereby dismissed for lack of merit, plus ten (10%) percent attorney’s fees.
SO ORDERED.
On 29 July 1998, the NLRC[iii][3] affirmed the labor arbiter’s decision in toto and declared that the latter’s findings and conclusions were supported by substantial evidence.[iv][4] After its motion for reconsideration was denied by the NLRC on 20 May 1999, petitioners repaired to the Court of Appeals.[v][5] The appellate court’s assailed decision was promulgated on 1 December 1999, upholding the decision of the NLRC, with the modification that petitioners were ordered to pay private respondent exemplary damages in the amount of P50,000.00. The appellate court reasoned out its decision,[vi][6] thus -
The basic issue here is: Whether or not petitioner is liable to pay private respondent’s claim as awarded by the NLRC, and whether or not there was abuse of discretion on the part of the NLRC in affirming such decision on appeal? To resolve this issue, this Court took time in looking closely at the pertinent provision of the Standard Employment Contract Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, particularly PART II, SECTION C, par. no. 4 (c), and par. no. 5, which states as follows:
“SECTION C. COMPENSATION AND BENEFITS
“4. The liabilities of the employer when the seaman suffers injury or illness during the term of his contract are as follows:
“x x x x
“c. The employer shall pay the seaman his basic wages from the time he leaves the vessel for medical treatment. After discharge from the vessel the seaman is entitled to hundred percent (100%) of his basic wages until he is declared fit to work or his degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days. x x x x
“5. In case of permanent total or partial disability of the seaman during the term of his employment caused by either injury or illness the seaman shall be compensated in accordance with the schedule of benefits enumerated in Appendix 1 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.
x x x . . .”
A cursory reading of these applicable contractual provisions and a thorough evaluation of the supporting evidence presented by both parties, lends strong credence to the contentions and arguments presented by private respondent.
The award of disability compensation has a clear and valid basis in the Standard Employment Contract and the facts as supported by the medical certificate issued by Dr. Nannette Domingo-Reyes of the Manila Doctors Hospital. Petitioners’ contention, that Dr. Domingo-Reyes is not company designated is far from the truth. The designation of the Manila Doctors Hospital by petitioners as the company doctor for private respondent cannot be denied. Their very act of committing private respondent for treatment at the Manila Doctors Hospital under the care of its physician is tantamount to company designation. The very act of paying the hospital bills by the petitioners constitutes their confirmation of such designation. Hence, petitioners cannot resort to the convenience of denying this fact just to evade their obligation to pay private respondent of his claims for disability benefit.
This Court also finds no basis on (sic) the petitioners’ contention that the company-designated [physician] must also be accredited with the POEA before he can engage in the medical treatment of a sick seaman. There is nothing in the Standard Employment Contract that provides this accreditation requirement, and even if there is, this would be absurd and contrary to public policy as its effect will deny and deprive the ailing seaman of his basic right to seek immediate medical attention from any competent physician. The lack of POEA accreditation of a physician who actually treated the ailing seaman does not render the findings of such physician (declaring the seaman permanently disabled) less authoritative or credible. To our mind, it is the competence of the attending physician, not the POEA accreditation, that determines the true health status of the patient-seaman, which in this instant case, is [sic] the attending physicians from the Manila Doctors Hospital.
As to the award of the balance of wages, this Court is inclined not to disturb the factual findings of the NLRC. The failure of the petitioners to present a strong and credible evidence supporting the fact of alleged payment of the balance of sickness justifies the award of such claim. The long standing doctrine in labor cases that “in case of doubt, the doubt is resolved in favor of labor” applies. For there are indications that the evidence presented by petitioners appears to be of dubious origin as private respondent challenged the petitioners to present the original copy of the quitclaim and the vouchers in a motion demanding from petitioners to produce the original copy of those documents purporting to show that he had received the alleged sum of P39,803.30, which allegedly shows the payment of the balance of his sickness wages. This motion was vehemently opposed by petitioners. To our mind, such opposition only created more doubts and eroded the veracity and credence of petitioners’ documentary evidence.
As to the award of attorney’s fees, the same is justified by the fact that private respondent actually hired the services of a lawyer to vindicate his right to claim for his disability benefit which is being arbitrarily denied to him by petitioners. Had it not been for the arbitrary denial of petitioners, private respondent could not have been compelled to hire the services of a lawyer to pursue his claims in court, for which he is presumed to have incurred costs.
With respect to private respondent’s claim for damages, this Court finds that the NLRC overlooked the attendance of negligence on the part of petitioners in their failure to provide immediate medical attention to private respondent. It further appears that negligence not only exists but was deliberately perpetrated by petitioners by its arbitrary refusal to commit the ailing private respondent to a hospital in New Zealand or at any nearest port deprived of his right to immediate medical attention by petitioners, which resulted to the serious deterioration of his health that caused his permanent partial disability. Such deprivation of immediate medical attention appears deliberate by the clear manifestation from petitioners’ own words which states that, “the proposition of the complainant that respondents should have taken the complainant to the nearest port of New Zealand is easier said than done. It is worthy to note that deviation from the route of the vessel will definitely result to loss of a fortune in dollars not only to the respondents but likewise to the owners of the cargoes being shipped by the said vessel.”
By petitioners’ own statement, they reveal their utter lack of concern for their Filipino crew. This kind of attitude cannot be taken to pass by this Court without appropriate sanction by way of payment of exemplary damages, if only to show that the life of a Filipino crew must be accorded due attention and respect by the petitioners. For after all, had it not been for the toils of this crew, among others, petitioners would not be doing as good in their business and making “fortunes in dollars.”
In affirming the decision of the Labor Arbiter, this Court finds that the NLRC never abused its discretion nor exceeded its jurisdiction.
Hence, this Court finds no valid basis to disturb the findings of the NLRC.
WHEREFORE, the decision of the NLRC dated 29 July 1998, and the Order dated 20 May 1999, are hereby AFFIRMED, and in addition thereto, petitioners are ordered to pay exemplary damages to private respondent in the sum of Fifty Thousand Pesos (P50,000.00).
SO ORDERED.
Petitioners’ motion for reconsideration was denied by the Court of Appeals in its Resolution of 11 February 2000. Hence, the present appeal.
Disability Benefits
Petitioners contend that the existence and degree of a seaman’s disability must be declared by a “company-designated physician” who must be accredited with the POEA. Following this line of reasoning, petitioners claim that private respondent is not entitled to disability benefits because he was found fit to return to work by Dr. Victoria Florendo Cayabyab, the designated physician of petitioners, who is also accredited with the POEA.[vii][7]
Disagreeing with petitioners’ stand, the labor arbiter ruled that, for purposes of determining compensation benefits under the Standard Employment Contract, an ailing seaman need not have his condition assessed by a doctor or hospital accredited with the POEA. Consequently, the labor arbiter gave more weight to the opinion of the specialists from the Manila Doctors Hospital who treated private respondent and declared him as having sustained a partial permanent disability and unfit to go back to his previous work.[viii][8] Meanwhile, the Court of Appeals held that petitioners’ act of committing private respondent for treatment at the Manila Doctors Hospital and of paying his hospital bills therein is tantamount to “company-designation,” and therefore, the certificate issued by Dr. Nanette Domingo-Reyes of the Manila Doctors Hospital describing private respondent as suffering from a partial permanent disability should be construed as decisive in the matter of private respondent’s entitlement to disability benefits. The appellate court also declared that nothing in the Standard Employment Contract requires the company-designated physician or hospital to also be accredited with the POEA.[ix][9]
In the case at bar, the parties are at odds as to the proper interpretation of the POEA Standard Employment Contract Governing the Employment of All Filipino Seamen On Board Ocean-Going Vessels (Standard Employment Contract), particularly Part II, Section C thereof, which provides that –
xxx xxx xxx
4. The liabilities of the employer when the seaman suffers injury or illness during the term of his contract are as follows:
a. The employer shall continue to pay the seaman his basic wages during the time he is on board the vessel;
b. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, dental, surgical and hospital treatment as well as board and lodging until the seaman is declared fit to work or to be repatriated.
However, if after repatriation the seaman still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician.
c. The employer shall pay the seaman his basic wages from the time he leaves the vessel for medical treatment. After discharge from the vessel the seaman is entitled to one hundred percent (100%) of his basic wages until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seaman shall submit himself to a post-employment medical examination by the company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of the seaman to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.
xxx xxx xxx
5. In case of permanent total or partial disability of the seaman during the term of employment caused by either injury or illness the seaman shall be compensated in accordance with the schedule of benefits enumerated in Appendix 1 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.
xxx xxx xxx
Petitioners’ contention that the existence and grade of a seaman’s disability must be pronounced by a physician accredited by the POEA does not find any support in the abovecited provision, nor in any other portion of the Standard Employment Contract. In order to claim disability benefits under the Standard Employment Contract, it is the “company-designated” physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latter’s employment. There is no provision requiring accreditation by the POEA of such physician. In fact, aside from their own gratuitous allegations, petitioners are unable to cite a single provision in the said contract in support of their assertions or to offer any credible evidence to substantiate their claim. If accreditation of the company-designated physician was contemplated by the POEA, it would have expressly provided for such a qualification, by specifically using the term “accreditation” in the Standard Employment Contract, to denote its intention. For instance, under the Labor Code it is expressly provided that physicians and hospitals providing medical care to an injured or sick employee covered by the Social Security System or Government Service Insurance System must be accredited by the Employees Compensation Commission.[x][10] It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control.[xi][11] There is no ambiguity in the wording of the Standard Employment Contract – the only qualification prescribed for the physician entrusted with the task of assessing the seaman’s disability is that he be “company-designated.” When the language of the contract is explicit, as in the case at bar, leaving no doubt as to the intention of the drafters thereof, the courts may not read into it any other intention that would contradict its plain import.[xii][12]
The word “designate” means to specify, to mark out and make known, to identify by name, to indicate, to show, to distinguish by mark or description, or to set apart for a purpose or duty.[xiii][13] The Court agrees with the appellate court’s ruling that petitioners’ act of committing private respondent for treatment at the Manila Doctors Hospital and paying the hospital bills therein is tantamount to “company-designation.” By such unequivocal acts, petitioners clearly set apart and distinguished the Manila Doctors Hospital, together with its team of specialists, as the ones qualified to assess the existence and degree of private respondent’s disability and thereby resolve the question of the latter’s entitlement to disability benefits under the Standard Employment Contract.
In addition to their having been effectively designated by petitioners, it was the physicians from the Manila Doctors Hospital who examined and treated private respondent for a little more than one month, subjecting the latter to a series of medical procedures, such as medical therapy, neurological surgical drainage for brain abscess, bilateral thalamic area S/P craniotomy (Burr Hole), and opthalmological (orbit) surgery for socket revision and reconstruction of his left eye. The extensive medical attention given to private respondent enabled the Manila Doctors Hospital specialists to acquire a detailed knowledge and familiarity with private respondent’s medical condition.[xiv][14] No doubt such specialized knowledge enabled these physicians to arrive at a much more accurate appraisal of private respondent’s condition, including the degree of any disability which he might have sustained, as compared to another physician not privy to private respondent’s case from the very beginning. Thus, the appellate court was not mistaken in giving more weight to the certificate issued by Dr. Nanette Domingo-Reyes of the Manila Doctors Hospital dated December 4, 1996, than to the one issued by Dr. Victoria Florendo Cayabyab.
On the strength of Dr. Domingo-Reyes’s medical certificate which stated that private respondent “can be classified under partial permanent disability and is not fit to go back to his previous work due to his mental state,” the labor arbiter awarded $25,000.00 as disability benefits, which award was upheld by the NLRC and the appellate court. Petitioners insist that there is no factual basis for the award of $25,000.00 since there is no finding as to the grade of permanent partial disability sustained by private respondent, in accordance with Appendix 1 of the Standard Employment Contract (Schedule of Disability or Impediment For Injuries Suffered and Diseases or Illness Contracted), and therefore, no means of determining the exact amount of compensation to which private respondent may be entitled.[xv][15]
The Court does not agree with petitioners’ position. Under the Standard Employment Contract the grade of disability suffered by the seaman must be ascertained in accordance with Appendix 1 of such contract, which is partially reproduced herein -
Appendix 1
SCHEDULE OF DISABILITY OR IMPEDIMENT
FOR INJURIES SUFFERED AND OR ILLNESS CONTRACTED
HEAD
Traumatic head injuries that result to:
1. Apperture unfilled with bone not over
three (3) inches without brain injury . . . . . . . . . . . . . . . . Gr. 9
2. Apperture unfilled with bone over
three (3) inches without brain injury . . . . . . . . . . . . . . . . Gr. 3
3. Severe paralysis of both upper or
lower extremities or one upper and one
lower extremity . . . . . . . . . . . . . . . . . . . . . . . Gr. 1
4. Moderate paralysis of two (2) extremities
producing moderate difficulty in
movements with self care activities . . . . . . . . . . . . . . . . Gr. 6
5. Slight paralysis affecting one extremity
producing slight difficulty with self-care
activities . . . . . . . . . . . . . . . . . Gr. 10
6. Severe mental disorder or Severe Complex
Cerebral function disturbance or post –
traumatic psychoneurosis which require
regular aid and attendance as to render worker
permanently unable to perform any work . . . . . . . . . . Gr. 1
7. Moderate mental disorder or moderate brain
functional disturbance which limits worker
to the activities of daily living with some
directed care or attendance . . . . . . . . . . . . . . . Gr. 6
8. Slight mental disorder or disturbance that
requires little attendance or aid and which
interferes to a slight degree with the working
capacity of the claimant . . . . . . . . . . . . . . . Gr. 10
9. Incurable imbecility . . . . . . . . . . . . . . . . . . . . . Gr. 1
Each grade under Appendix 1 has an equivalent disability allowance or benefit expressed in terms of a percentage of the maximum amount of $50,000.00. This is specified in Appendix 1-A of the Standard Employment Contract -
APPENDIX 1-A
SCHEDULE OF DISABILITY ALLOWANCES
Impediment Grace Impediment
1 Maximum Rate x 120.00%
2 “ x 88.81%
3 “ x 78.36%
4 “ x 68.66%
5 “ x 58.96%
6 “ x 50.00%
7 “ x 41.80%
8 “ x 33.59%
9 “ x 26.12%
10 “ x 20.15%
11 “ x 14.93%
12 “ x 10.45%
13 “ x 6.72%
14 “ x 3.74%
Maximum Rate: US$50,000.
To be paid in Philippine Currency equivalent at the exchange rate prevailing during the time of payment.
Private respondent asked petitioner for disability benefits in the amount of $25,000.00, or fifty percent (50%) of the maximum rate of $50,000.00, which, under Appendix 1-A, is awarded when the seaman sustains a grade 6 disability. One of the grade 6 head injuries listed in Appendix 1, specifically number seven (7), is described as a “moderate mental disorder or moderate brain functional disturbance which limits worker to the activities of daily living with some directed care or attendance.” This coincides with Dr. Domingo-Reyes’ diagnosis of private respondent’s condition, as follows -
xxx xxx xxx
Work-ups and Management:
Patient was admitted on an emergency bases for drowsiness, behavioral change and on and off fever. This started with headaches since the first week of June 1995 while on duty (on voyage). Patient progressively deteriorated and arrived here already dehydrated with high grade fever. (emphasis supplied)
Emergency CT Scan of the brain revealed rounded masses in both thalamus on the brain; the larger mass was situated at the right.
Burr hole at the right parietal and drainage of the right thalamic abscess was done on June 26, 1995. Repair of shallow fornix of left eye and biopsy was done for culture studies thereafter.
Mr. De Lara stayed in the hospital for 33 days and was still in bedridden state when discharge. He became ambulant on mid-August 1996 but his cerebral functions (cognitive and behavioral) remain impaired.
This is his 18th month of illness. His admission last June 24, 1995 is considered catastrophic. He now can be classified under partial permanent disability and is not fit to go back to his previous work due to his mental state.[xvi][16] (emphasis supplied)
xxx xxx xxx
Thus, the medical certificate of Dr. Domingo-Reyes is more than sufficient basis for the award of disability benefits in the amount of $25,000.00 in favor of private respondent.
Sickness wages
Petitioners assert that the award of $1,137.00, representing the balance of the sickness wages owed to private respondent, is erroneous and in absolute disregard of their documentary evidence - particularly the three check vouchers in the total amount of P89,354.80, all issued in 1995 in favor of either private respondent or his wife, and the “Sickwages Release & Quitclaim” - which, according to petitioners, taken together would prove that they had paid private respondent the total amount of P89,354.80, or $3,480.00, corresponding to the 120 days sickness wages as required under the Standard Employment Contract.
Contrary to petitioners’ assertions, the labor arbiter held that only P49,546.00 ($1,943.00) was paid by petitioners and that private respondent is still entitled to the balance of the sickness wages in the amount of $1,537.00. According to the labor arbiter, petitioners failed to prove that they had paid this amount to private respondent, notwithstanding the document entitled “Sickness Release & Quitclaim” introduced by petitioners in evidence, which was not given credence.[xvii][17] The NLRC and the Court of Appeals concurred with the labor arbiter on this issue. The appellate court held that the documentary evidence of petitioners was insufficient to support their contentions.[xviii][18]
The Supreme Court has always accorded respect and finality to the findings of fact of the NLRC, particularly if they coincide with those of the Labor Arbiter, when supported by substantial evidence. The reason for this is that a quasi-judicial agency like the NLRC has acquired a unique expertise because its jurisdiction is confined to specific matters.[xix][19] Whether or not petitioners actually paid the balance of the sickness wages to private respondent is a factual question. In the absence of proof that the labor arbiter or the NLRC had gravely abused their discretion, the Court shall deem conclusive and cannot be compelled to overturn this particular factual finding.[xx][20]
Damages
We affirm the appellate court’s finding that petitioners are guilty of negligence in failing to provide immediate medical attention to private respondent. It has been sufficiently established that, while the M/V T.A. VOYAGER was docked at the port of New Zealand, private respondent was taken ill, causing him to lose his memory and rendering him incapable of performing his work as radio officer of the vessel. The crew immediately notified the master of the vessel of private respondent’s worsening condition. However, instead of disembarking private respondent so that he may receive immediate medical attention at a hospital in New Zealand or at a nearby port, the master of the vessel proceeded with the voyage, in total disregard of the urgency of private respondent’s condition. Private respondent was kept on board without any medical attention whatsoever for the entire duration of the trip from New Zealand to the Philippines, a voyage of ten days. To make matters worse, when the vessel finally arrived in Manila, petitioners failed to directly disembark private respondent for immediate hospitalization. Private respondent was made to suffer a wait of several more hours until a vacant slot was available at the pier for the vessel to dock. It was only upon the insistence of private respondent’s relatives that petitioners were compelled to disembark private respondent and finally commit him to a hospital.[xxi][21] There is no doubt that the failure of petitioners to provide private respondent with the necessary medical care caused the rapid deterioration and inevitable worsening of the latter’s condition, which eventually resulted in his sustaining a permanent disability.
In light of the foregoing, petitioners are liable for moral damages for the physical suffering and mental anguish caused to private respondent.[xxii][22] There is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances.[xxiii][23] In the present case, the Court considers the amount of P50,000.00 in moral damages as proper.[xxiv][24]
Meanwhile, exemplary damages are imposed by way of example or correction for the public good, pursuant to Article 2229 of the Civil Code. They are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate, or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded.[xxv][25] In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.[xxvi][26] Coming now to the case at bar, the appellate court found that –
… negligence not only exists but was deliberately perpetrated by petitioners by its arbitrary refusal to commit the ailing private respondent to a hospital in New Zealand or at any nearest port … which resulted to the serious deterioration of his health that caused his permanent partial disability. Such deprivation of immediate medical attention appears deliberate by the clear manifestation from petitioners’ own words which states that, “the proposition of the complainant that respondents should have taken the complainant to the nearest port of New Zealand is easier said than done. It is worthy to note that deviation from the route of the vessel will definitely result to loss of a fortune in dollars not only to the respondents [petitioners herein] but likewise to the owners of the cargoes being shipped by the said vessel.”
Petitioners never denied making this statement. Given the prevailing circumstances, the appellate court’s award of P50,000.00 as exemplary damages is adequate, fair, and reasonable.[xxvii][27]
Although the labor arbiter awarded attorney’s fees, which award was subsequently affirmed by the NLRC and the Court of Appeals, the basis for the same was not discussed in his decision nor borne out by the records of this case, and should therefore be deleted. There must always be a factual basis for the award of attorney’s fees.[xxviii][28] This is consistent with the policy that no premium should be placed on the right to litigate.[xxix][29]
WHEREFORE, the 1 December 1999 Decision and 11 February 2000 Resolution of the Court of Appeals are AFFIRMED, with the modification that petitioners must also pay private respondent P50,000.00 as moral damages and the award of attorney’s fees is deleted.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur. [iii][3] First Division, composed of Commissioners Vicente S.E. Veloso, ponente; Rogelio I. Rayala, presiding commissioner; and Alberto R. Quimpo.
[v][5] Thirteenth Division, composed of Justices Omar U. Amin, ponente; Hector L. Hofilena, chairman; and Jose L. Sabio.
[xiii][13] Words and Phrases, Permanent Edition,“Designate,” vol. 12, 415 (1954). Citing State v. Noah, 124 N.W. 1121, 1126, 20 N.D. 281; Colgrove v. U.S., C.A. Cal., 176 F.2d 614, 617; Lankford v. Pope, 57 S.E.2d 538, 540, 206 Ga. 430; Thrailkill v. Smith, 138 N.E. 532, 534, 106 Ohio St. 1; Hall v. Cotton, 180 S.W. 779, 781, 167 Ky. 464, L.R.A.1916C, 1124; State ex rel. Rocky Mountain Bell Tel. Co. v. City of Red Lodge, 83 P. 642, 643, 33 Mont. 345, quoting and adopting definition in Webst.Int.Dict.; Lowry v. Davis, 70 N.W. 190, 101 Iowa, 236, 239; Jewel Tea Co. v. City of Geneva, 291 N.W. 664, 669, 137 Neb. 768; St. Louis Police Relief Ass’n v. Tierney, 91 S.W. 968, 974, 116 Mo.App. 447.
[xix][19] Travelaire & Tours Corporation v. National Labor Relations Commission, 294 SCRA 505 (1998); Suarez v. National Labor Relations Commission, 293 SCRA 496 (1998); Autobus Workers’ Union v. National Labor Relations Commission, 291 SCRA 219 (1998); Prangan v. National Labor Relations Commission, 289 SCRA 142 (1998); International Pharmaceuticals, Inc v. National Labor Relations Commission, 287 SCRA 213 (1998); Villa v. National Labor Relations Commission, 284 SCRA 105 (1998).
[xx][20] Gandara Mill Supply v. National Labor Relations Commission, 300 SCRA 702 (1998); National Union of Workers in Hotels, Restaurants and Allied Industries v. National Labor Relations Commission, 287 SCRA 192 (1998).
[xxiv][24] Ong v. Court of Appeals, 301 SCRA 387 (1999); Philtranco Service Enterprises, Inc. v. Court of Appeals, 273 SCRA 562 (1997).
[xxvii][27] Petitioners have never questioned the jurisdiction of the labor arbiter or the NLRC over private respondent’s claim for damages. See Zamboanga v. Buat, 243 SCRA 47 (1995); Ocheda v. Court of Appeals, 214 SCRA 629 (1992).
[xxviii][28] Congregation of the Religious of the Virgin Mary v. Court of Appeals, 291 SCRA 385 (1998).
SECOND DIVISION
[G.R. No. 114951. July 18, 2003]
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF VALENZUELA, METRO MANILA, CLERK OF COURT AND EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF PASIG, METRO MANILA and JUDGE TEOFILO GUADIZ, JR., Presiding Judge, Regional Trial Court of Makati, Metro Manila, Branch 147, petitioners, vs. COURT OF APPEALS, LEY CONSTRUCTION & DEVELOPMENT CORP., LC BUILDERS & DEVELOPERS, INC., METRO CONTAINER CORP., MANUEL T. LEY and JANET C. LEY, respondents.
D E C I S I O N
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision[1][1] of the Court of Appeals in CA-G.R. SP No. 31251 nullifying the Order of the Regional Trial Court (RTC) of Makati[2][2] in Civil Case No. 91-2495 dated February 23, 1993 lifting the writ of preliminary injunction earlier issued by the said RTC.
The Antecedents
Between January 1988 to April 1990, the private respondents Ley Construction & Development Corporation (Ley Construction), LC Builders & Developers Corporation (LC Builders), Metro Container Corporation (MCC) and the spouses Manuel and Janet Ley obtained loans from the petitioner Philippine Commercial International Bank (PCIB) amounting to around to P98,800,000 evidenced by eighteen promissory notes. To secure the said loans, the private respondents executed real estate mortgages and amended real estate mortgages over its property situated in Mandaluyong covered by Transfer Certificate of Title (TCT) No. 43131, and its property situated in Valenzuela City covered by TCT Nos. 6572 and 6580. They also executed three chattel mortgages over several of their movable properties in favor of petitioner PCIB.
The private respondents defaulted in the payment of their obligations in the amount of P105,442,145 and despite demands made by petitioner PCIB, failed to pay their account. On August 16, 1991, petitioner PCIB filed separate requests for extrajudicial foreclosure of the amended real estate mortgages with the petitioner ex-officio sheriff of the RTC of Pasig City and with the petitioner ex-officio sheriff of the RTC of Valenzuela, and a letter for the extrajudicial foreclosure of chattel mortgage with the petitioner ex-officio sheriff of the RTC of Valenzuela.[3][3] In due course, the petitioner ex-officio sheriff of Pasig City set the sale at public auction on September 24, 1991 of the property covered by TCT No. 43131 on September 24, 1991. Meanwhile, the petitioner ex-officio sheriff of Valenzuela City set the sale of the personal properties at public auction on September 16, 1991 at the compound of the mortgagors at Barrio Pulang Lupa, Valenzuela, and the sale of properties covered by TCT Nos. 6572 and 6580 on October 3, 1991.
Before any of the auction sales could proceed, the private respondents, through their counsel, the law firm of Quisumbing Torres & Evangelista, filed a complaint against the petitioners PCIB and the ex-officio sheriffs on September 10, 1991 with the RTC of Makati, for injunction and damages with a prayer for the issuance of a temporary restraining order, seeking to enjoin the said sheriffs from selling at public auction the real and personal properties covered by the mortgage contracts. The private respondents as plaintiffs had eight causes of action against the petitioner. On their first to fourth causes of action, the private respondents as plaintiffs therein alleged inter alia that petitioner PCIB had agreed to the extensions of the due dates of the private respondents’ loan to March 1992, with a moratorium on the payment of interest during the extension of the same; however, petitioner PCIB foreclosed the said mortgages before the lapse of the said extension. On their fifth to eighth causes of action, the private respondents alleged inter alia that the notice of sale of the chattels was defective because (a) it included the sale of the chattels for the payment of loans not covered by the said chattels; (b) it refers to the foreclosure of only one chattel mortgage but the properties sought to be sold covered all the properties subject of the three chattel mortgages, and as such, the requests to foreclose the chattel mortgages were premature; and (c) it failed to comply with the requirements of Section 14 of Act No. 1508, otherwise known as the Chattel Mortgage Law.
The private respondents prayed that a temporary restraining order or writ of preliminary injunction be issued enjoining the defendants sheriffs from conducting already scheduled auction sales, any other sale of the plaintiffs’ assets, and any other foreclosure of the real estate mortgages and chattel mortgages and ordering the restructuring of the obligations of the plaintiffs Ley Construction and LC Builders so that they could be repaid on easier terms over a period of several years or at least until the current recession in the construction industry is over, and to condemn defendant PCIB to pay damages; and after due proceedings, judgment be rendered making permanent any writ of preliminary injunction which may have been issued by the court.
The case was raffled to the RTC of Makati Branch 147[4][4] and docketed as Civil Case No. 91-2495.[5][5]
On September 12, 1991, the RTC issued a temporary restraining order temporarily enjoining the petitioners sheriffs and their respective deputies from proceeding with the September 16 and 24, and October 3, 1991 auction sales, respectively.[6][6] On September 16, 1991, the RTC issued another temporary restraining order enjoining the petitioner ex-officio sheriff of the RTC of Valenzuela and his deputies from proceeding with the October 3, 1991 auction sale.
Instead of filing an answer to the complaint, petitioner PCIB filed a motion to dismiss on the ground that it did not grant the private respondents any extension to pay their account; hence, the private respondents as plaintiffs had no cause of action against the petitioner.
The application for the issuance of a preliminary injunction was set for hearing. On October 16, 1991, the RTC issued an order denying the motion to dismiss and granting a writ of preliminary injunction enjoining the conduct of any of the auction sales, conditioned upon the posting of a bond by the private respondents in the amount of P1,000,000. On November 20, 1991, petitioner PCIB filed a motion for reconsideration of the October 16, 1991 Order, but the court denied the said motion per its Order on February 26, 1992. The private respondents posted the requisite injunction bond of P1,000,000.
Petitioner PCIB filed a petition for certiorari and mandamus[7][7] with the Court of Appeals (CA) for the nullification of the October 16, 1991 and February 26, 1992 Orders of the RTC. While the case was still pending with the said court, the law firm of Quisumbing Torres & Evangelista withdrew their appearance as counsel for the private respondents with the conformity of the latter.[8][8] The law firm of San Vicente De Leon & Associates entered its appearance as new counsel for the private respondents.
On January 14, 1993, the CA rendered its decision[9][9] dismissing the petition.[10][10] Entry of judgment was made of record on February 8, 1993.[11][11] The private respondents, through the law firm of San Vicente De Leon & Associates, were served with a copy of the said entry of judgment.
With the dismissal of its petition by the CA, petitioner PCIB filed on February 3, 1993 its answer to the complaint in Civil Case No. 91-2495 in the RTC of Makati, serving a copy thereof on the law firm of San Vicente De Leon & Associates.[12][12]
On February 4, 1993, the law firm of San Vicente De Leon & Associates filed a manifestation with the RTC that it had no authority to represent the private respondents in Civil Case No. 91-2495 as it was not the counsel of record in the said case.[13][13] Petitioner PCIB filed a counter-manifestation stating that since the law firm of Quisumbing Torres & Evangelista had withdrawn its appearance and the law firm of San Vicente De Leon & Associates had entered its appearance, the copy of the petitioners’ answer to the complaint was duly served on the private respondents through the latter law firm.[14][14] Petitioner PCIB further manifested that, nonetheless, it was serving a copy of its answer to the complaint on the private respondents themselves. Petitioner PCIB served a copy of the said answer on the private respondents on February 4, 1993.[15][15]
Simultaneous with the filing of its answer to the complaint, petitioner PCIB filed a second motion to lift the writ of preliminary injunction issued by the court on October 16, 1991 on the following grounds: (a) at the time of the filing of the said second motion, the private respondents’ obligation had reached P161,033,070.49; hence, the bond filed by the private respondents in the amount of P1,000,000 was grossly inadequate; and (b) the extension alleged by the private respondents to have been granted to them by petitioner PCIB to pay their obligation had already lapsed.[16][16] The petitioner served a copy of the said motion on the law firm of San Vicente De Leon & Associates.[17][17]
On February 8, 1993, the law firm of San Vicente De Leon & Associates filed a manifestation with the RTC reiterating therein that it was not the counsel of record in the said case, and as such was not authorized to represent the private respondents. The said law firm was the counsel of the private respondents only in CA-G.R. SP No. 27573 and not in Civil Case No. 91-2495 before the RTC.[18][18]
Petitioner PCIB filed a second counter-manifestation that service to the law firm of San Vicente De Leon & Associates should be considered valid and binding on the private respondents because the law firm of Quisumbing Torres & Evangelista had already withdrawn its appearance as counsel of the private respondents in CA-G.R. SP No. 27573. Petitioner PCIB prayed to the court to order the private respondents to indicate which law office was their counsel. The petitioner served a copy of the said manifestation to the private respondents. It also served a copy of the second motion to lift the writ of preliminary injunction on February 9, 1993 on the private respondents.[19][19] The private respondents did not file any opposition to the said motion, and likewise failed to appear during the hearing of February 12, 1993.
The private respondents thereafter engaged the service of Atty. Noel M. Malaya, who entered his appearance as counsel for the private respondents in Civil Case No. 91-2495 on February 15, 1993, serving a copy thereof on the petitioner’s counsel.[20][20] Atty. Malaya alleged in his appearance that the same was with the conformity of the private respondents. He did not file any opposition or comment on the second motion of petitioner PCIB.
On February 23, 1993, the RTC issued an order lifting the writ of preliminary injunction it previously issued for the following reasons: (a) there was no opposition to the petitioners’ motion; and (b) the continued effectivity of the writ of preliminary injunction had become improvident.[21][21]
With the lifting of the writ of preliminary injunction, the petitioner ex-officio sheriff of the RTC of Pasig issued on March 1, 1993 a notice of sheriff’s sale, scheduling the sale of the Mandaluyong property on March 30, 1993.[22][22] On March 2, 1993, the petitioner ex-officio sheriff of the RTC of Valenzuela likewise issued a notice of sheriff’s sale setting the sale of the Valenzuela properties also on March 30, 1993.[23][23] The sale of the mortgaged chattels at public auction was scheduled on March 18, 1993 in front of the compound of the private respondents in Valenzuela, Metro Manila, where the chattels were located. The private respondents were served with copies of the said notices. As required, the notices of sale for the real properties in Valenzuela were published in the Metropolitan Newsweek on its March 2, 13 and 20, 1993 issues.
Instead of filing with the RTC of Makati in Civil Case No. 91-2495 a motion for the reconsideration of its February 23, 1993 Order or a supplemental complaint therein, the private respondents filed on March 17, 1993 with the RTC of Manila, through Atty. Malaya, a complaint for injunction and damages against the petitioners docketed as Civil Case No. 93-65135[24][24] with a prayer for a temporary restraining order to enjoin the respondents and proceeding with the auction sale of the mortgaged chattels on March 18, 1993. The private respondents alleged inter alia that the sale at public auction of the chattels had been enjoined by the RTC of Makati, Branch 147; and that they were suddenly notified that the sale at public auction was reset on March 18, 1993; they were not given the requisite notice of the sale of the mortgaged chattels on March 18, 1993 as mandated by Act No. 1508; and that the sale at public auction was to be conducted in a private place in front of the compound of the private respondents in Valenzuela and not in a public place as mandated by the said law. On the same day, Executive Judge Rosalio dela Rosa of the RTC of Manila issued a temporary restraining order enjoining the sale of the mortgaged chattels.[25][25] The case was raffled to Branch 34 of the court.[26][26] On March 18, 1993, the petitioners, as defendants therein, filed a motion to dismiss the complaint on the ground that the private respondents had no cause of action against them, serving a copy thereof to Atty. Malaya.
In a parallel development, the private respondents, through Atty. Malaya, opted to file a reply to the answer of petitioner PCIB. He filed a Motion dated March 23, 1993 to admit reply in Civil Case No. 91-2495 to the answer of petitioner PCIB. A copy of the motion was duly served on the counsel of petitioner PCIB. The private respondents set the hearing of their motion on April 2, 1993 at 10:00 a.m.
The foreclosure sale of the mortgaged real properties in Mandaluyong and Valenzuela proceeded as scheduled on March 30, 1993 with petitioner PCIB as the highest bidder. On March 30, 1993, the petitioner sheriff of the RTC of Valenzuela executed a certificate of sale over the said properties in favor of the petitioner.[27][27] On March 31, 1993, the petitioner sheriff of the RTC of Pasig executed a certificate of sale over the properties in favor of petitioner PCIB. The private respondents were furnished with copies of the said certificates.
On March 31, 1993, the private respondents, through the Quisumbing Torres & Evangelista Law Office, filed in Civil Case No. 91-2495 an emergency motion for reconsideration, set for hearing on April 9, 1993 with an application for temporary restraining order of the February 23, 1993 Order of the court lifting the writ of preliminary injunction previously issued, for the reinstatement of the writ of preliminary injunction issued by the court on October 16, 1991,[28][28] and for the expansion of the coverage of the said writ, thus:
WHEREFORE, plaintiffs urgently and respectfully pray that the Order dated 23 February 1993 be reconsidered, that the writ of preliminary injunction be immediately reinstated, and that said writ be expanded to enjoin defendants and their deputies, employees and agents from implementing the foreclosure and sheriff’s sale of 30 March 1993, including but not limited to (a) the issuance of the certificate of sale, (b) the annotation of the sheriff’s sale on Transfer Certificate of Title No. 43131, (c) the filing of any petition for a writ of possession of the subject real property, and (d) the consolidation of title in favor of defendant PCIB.
In the meantime and pending the hearing and resolution of this Emergency Motion, plaintiffs urgently and respectfully pray for the issuance of a temporary restraining order enjoining defendants and their deputies, employees and agents from implementing the foreclosure and sheriff’s sale of 30 March 1993, including but not limited to (a) the issuance of the certificate of sale, (b) the annotation of the sheriff’s sale on Transfer Certificate of Title No. 43131, and (c) the filing of any petition for writ of possession of the subject real property.[29][29]
The private respondents alleged inter alia that they had not been served with a copy of the second motion of petitioner PCIB for the lifting of the writ of preliminary injunction heretofore issued by the court, as well as a copy of the order of the court lifting the same. They also alleged that Atty. Noel M. Malaya was merely their collaborating counsel. Petitioner PCIB opposed the emergency motion of the private respondents, alleging inter alia that the said motion was a mere scrap of paper as the private respondents’ counsel of record is Atty. Malaya; the motion was set on Good Friday; the sales at public auction of the Mandaluyong and Valenzuela properties had already been consummated; and that private respondents indulged in forum shopping by earlier filing a complaint in the RTC of Manila in Civil Case No. 93-65135 with a plea for a temporary restraining order to abort the March 18, 1993 sale at public auction of the mortgaged chattels, instead of filing a motion for reconsideration of the February 23, 1993 Order of the RTC in Civil Case No. 91-2495.[30][30]
The private respondents were served with a copy of the said pleading of petitioner PCIB through Atty. Malaya. The private respondents, through the Quisumbing Torres & Evangelista Law Office, filed a reply to the opposition of the petitioners. They alleged inter alia that their emergency motion was not a mere scrap of paper because Atty. Malaya was their collaborating counsel.[31][31] However, the RTC of Makati did not issue any temporary restraining order. The private respondents filed an amended notice of hearing for their emergency motion on April 13, 1993 at 8:30 a.m. but served a copy thereof on petitioner PCIB only at 11:00 a.m. of the same day. The branch clerk of court reset the hearing of the said motion on April 16, 1993 at 8:30 a.m.
In the meantime, on April 1, 1993, petitioner PCIB filed an ex-parte petition with the RTC of Pasig for the issuance of a writ of possession over the property covered by TCT No. 43131 sold by the petitioner sheriff of the RTC of Pasig at public auction to petitioner PCIB.[32][32]
On April 26, 1993, petitioner PCIB filed a petition for a writ of possession with the RTC of Valenzuela City over the properties sold at public auction. The case was raffled to Branch 75 of the court.[33][33] The private respondents, through Atty. Vicente T. Verdadero, filed an opposition to the said petition.[34][34] On May 24, 1993, the RTC of Valenzuela issued an order granting the petition for a writ of possession on a bond of P1,200,000 to be approved by the court.[35][35] Petitioner PCIB assured the court that:
The petitioner likewise assured the respondent that the former will not disrupt the operation of the respondent which employs more or less 5,000 people and will not also take possession of the chattels inside the compound of the respondent corporation referring to heavy machineries because the mortgages on the chattels have not yet been foreclosed by the petitioner.
With these assurances made by the petitioner thru counsel to respondent, the court has no alternative except to give due course to the instant petition for issuance of a writ of possession pursuant to Act 3135 as amended by Act 4118 pending redemption which will expire on March 31, 1994.[36][36]
Meanwhile, on April 29, 1993, the RTC of Manila, Branch 34, issued an order granting the petitioners’ motion to dismiss in Civil Case No. 93-65135 on the ground of the pendency of Civil Case No. 91-2495 filed with the RTC of Makati. The court ratiocinated that it had no power to interfere by injunction with the judgment or orders of the RTC of Makati of concurrent or coordinate jurisdiction.[37][37] The private respondents did not file any motion for reconsideration of the said order. With the dismissal of the complaint in Civil Case No. 93-65135, the deputy sheriff of Valenzuela issued a notice of sheriff’s sale on April 21, 1993 setting the sale of the mortgaged chattels at the compound of the private respondents in Valenzuela on May 4, 1993.[38][38]
On May 3, 1993 or barely four days after the dismissal by the RTC of Manila of Civil Case No. 93-65135 and barely a day before the sale at public auction, the private respondents, through Atty. Malaya, filed another complaint[39][39] with the RTC of Manila against the petitioner and the sheriff of Valenzuela with a prayer for temporary restraining order to enjoin the said sheriff and petitioner PCIB from conducting the auction sale of the mortgaged chattels on May 4, 1993. The case was raffled to Branch 54.[40][40] The private respondents alleged inter alia that in Civil Case No. 91-2495, the RTC of Makati had lifted the writ of preliminary injunction it had previously issued but that the private respondents had filed a motion for the reconsideration thereof which remained unresolved; their complaint for injunction and damages in Civil Case No. 93-65135 was still pending with the RTC of Manila and thus the temporary restraining order issued by the said court had already been lifted. The sheriff set the sale at public auction of the mortgaged chattels on May 4, 1993 without giving the mortgagees notice thereof as required by Act 1508. Despite the allegations of the private respondents in their complaint, Executive Judge Rosalio dela Rosa of the RTC of Manila issued on the said date, a temporary restraining order enjoining the sale of the mortgaged chattels at public auction.[41][41] As a consequence, the petitioner ex-officio sheriff of Valenzuela had to cancel the auction sale of the mortgaged chattels on May 4, 1993 and to reset the same on June 14, 1993.[42][42]
On June 10, 1993, the private respondents, through the Quisumbing, Torres & Evangelista Law Office, filed a petition for certiorari and mandamus with the CA, docketed as CA-G.R. SP No. 31251, for the nullification of the February 23, 1993 Order of the RTC of Makati in Civil Case No. 91-2495, lifting the writ of preliminary injunction it previously issued. Although the sale of the chattels at public auction set on June 14, 1993 was the subject of the private respondents’ complaint in Civil Cases Nos. 93-65135 and 93-65757, the petition prayed for the issuance of a temporary restraining order enjoining the sale of the mortgaged chattels on June 14, 1993. The private respondents argued that they had not been served with a copy of the second motion to lift the writ of preliminary injunction. The service of a copy of the said motion on the law firm of San Vicente De Leon & Associates instead of the law firm of Quisumbing Torres & Evangelista was ineffectual insofar as the private respondents were concerned, as the law firm of Quisumbing Torres & Evangelista remained as their counsel of record in Civil Case No. 91-2495. The law firm of San Vicente De Leon & Associates was the counsel of record of the private respondents only in CA-G.R. SP No. 27573. The private respondents were denied their right to due process when the RTC issued its February 23, 1993 Order without affording them a chance to be heard on the petitioners’ second motion.
On August 13, 1993, the CA rendered its decision in CA-G.R. SP No. 31251 setting aside the February 23, 1993 Order of the RTC of Makati, declaring the same null and void and restoring the status of the parties prior to the issuance of the said order. The decretal portion of the decision reads:
WHEREFORE and upon all the foregoing, the order of respondent court dated February 23, 1993 and all subsequent proceedings arising from the said questioned order are hereby SET ASIDE as null and void. The parties are restored to the status quo ante, i.e., to their respective positions before the issuance of the order of February 23, 1993.[43][43]
The CA ruled that the service to the San Vicente De Leon & Associates Law Office of the petitioners’ second motion to lift the writ of preliminary injunction was not binding on the private respondents since their counsel of record in Civil Case No. 91-2495 was the Quisumbing Torres & Evangelista Law Office. The private respondents were denied their right to due process when the RTC granted the second motion of the petitioners without affording the private respondents their right to be heard thereon. The private respondents were not guilty of forum shopping in filing their complaint with the RTC of Manila in Civil Case No. 93-65135. Petitioner PCIB filed a motion for the reconsideration of the decision of the CA.
Meanwhile, on August 19, 1993, the RTC of Manila, Branch 54, issued an order in Civil Case No. 93-65757 dismissing the complaint of the private respondents, holding that the latter engaged in forum shopping and that it was improper for the said court to interfere with a case pending in the RTC of Makati being a court of equal rank, and more so with the pending certiorari filed in CA-G.R. SP No. 31251 with the CA.[44][44] The court stated that it was leaving it up to petitioner PCIB (defendants therein) to take steps for disciplinary action against the counsel of the private respondents (the plaintiffs therein). The private respondents did not appeal the order.
On April 13, 1994, the CA issued an order in CA-G.R. SP No. 31251 denying petitioner PCIB’s motion for reconsideration.[45][45]
In the meantime, the trial court issued an order on July 28, 1994 in Civil Case No. 91-2495 dismissing the case for failure of the private respondents to prosecute the same.[46][46] On September 12, 1994, the private respondents filed a motion for reconsideration of the said order.[47][47]
Hence, the petition at bar.
The petitioners aver that contrary to the ruling of the CA, the private respondents were accorded their right to due process. When the Makati RTC came out with its February 23, 1993 Order granting their second motion for the lifting of the writ of preliminary injunction heretofore issued by the said court, the private respondents had no counsel when petitioner PCIB filed its second motion and had to serve a copy thereof on the private respondents. The private respondents engaged in a rigodon de abogados thus confusing the petitioners, besides being grossly negligent in failing to respond to and oppose the second motion of petitioner PCIB and in failing to file a motion for reconsideration of the February 23, 1993 Order of the RTC before filing their emergency motion. The private respondents resorted to forum shopping to abort the sale at public auction of the mortgaged chattels before and after filing their emergency motion. The RTC had the authority to dissolve ex parte the writ of preliminary injunction heretofore issued by it for the reason that the continued effectivity of the writ of preliminary injunction heretofore issued by it had become improvident. Finally, the RTCs of Pasig City and Valenzuela City had already issued writs of possession over the subject properties sold at public auction. The CA should have dismissed the private respondents’ petition for certiorari and mandamus, for being moot and academic.
In their comment on the petition, the private respondents aver that their counsel of record in Civil Case No. 91-2495 was the Quisumbing Torres & Evangelista Law Office and not the firm of San Vicente De Leon & Associates. The service on the latter law firm of a copy of the second motion of petitioner PCIB was not binding on the private respondents. The RTC of Makati denied the private respondents the right to due process when it granted ex parte the second motion of petitioner PCIB and lifted the writ of preliminary injunction heretofore issued by it without affording the private respondents a chance to be heard on the said motion. They acted with due diligence in filing their emergency motion to stave off the sale at public auction of the mortgaged chattels on May 4, 1993. Neither did they commit forum shopping in filing their complaint in Civil Case No. 93-65153 with the RTC of Manila, as their causes of action in the said case[48][48] were different from their principal causes of action before the Makati RTC in Civil Case No. 93-2495.[49][49]
The petition is impressed with merit.
We agree with the private respondents that their counsel of record when they filed their complaint with the RTC of Makati in Civil Case No. 91-2495 was the Quisumbing Torres & Evangelista Law Office. The firm withdrew its appearance as counsel for the private respondents and was substituted by San Vicente De Leon & Associates as counsel of said parties only in the CA case. Thus, despite the withdrawal by the Quisumbing Torres & Evangelista Law Office as counsel of the private respondents in CA-G.R. SP No. 27573, it remained as counsel of the private respondents in Civil Case No. 91-2495 pending in the RTC of Makati. Petitioner PCIB was mandated to serve a copy of its second motion for the lifting of the writ of preliminary injunction on the private respondents through their counsel of record, Quisumbing Torres & Evangelista Law Office, conformably to Section 2, Rule 13 of the Rules of Court, as amended, which reads:
Section 2. Filing and service, defined. – Filing is the act of presenting the pleading or other papers to the clerk of court.
Service is the act of providing a party with a copy of the pleading or paper concerned. If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side.
The service of pleadings and processes must be made on counsel and not on the parties.[50][50] There was no order from the trial court directing the service of the petitioner’s second motion on the private respondents personally.
Prescinding from petitioner PCIB’s procedural faux pas, we do not agree with the ruling of the CA that the private respondents were denied their right to due process. In the case of Development Bank of the Philippines v. Court of Appeals,[51][51] we ruled that the essence of due process is that a party be afforded a reasonable opportunity to be heard in support of his defense. What the law abhors and prohibits is the absolute absence of the opportunity to be heard. Hence, a party cannot feign denial of due process when he had been afforded the opportunity to present his side. In Bernardo v. Court of Appeals,[52][52] we ruled that lack of opportunity to be heard and not necessarily absence of prior notice constitutes a violation of due process. As long as a party is given the opportunity to be heard either through oral arguments or through pleadings, such as a motion for reconsideration, and defend his interest in due course, he would have no reason to complain for it is this opportunity to be heard that makes up the essence of procedural due process.[53][53]
In this case, the private respondents were accorded their right to due process but by their negligence they failed to take the appropriate immediate remedies to protect their rights and interests. Worse, the private respondents indulged in forum shopping and flagrantly violated the principle of judicial stability. As aforestated, the private respondents were served with a copy of the petitioner’s second motion on February 9, 1993. They secured the professional services of Atty. Malaya as their counsel who filed his notice of appearance on February 15, 1993. As such new counsel of the private respondents, he was presumed and obliged to acquaint himself with all the antecedent processes and pleadings of the parties, and all the proceedings that may have transpired prior to his appearance as counsel.[54][54] It was also incumbent on the said counsel to communicate with the private respondents’ counsel of record, Quisumbing Torres & Evangelista Law Office, to ascertain the status of the case and of any pleadings that may have been filed by petitioner PCIB. The private respondents were also obliged to apprise their counsel, Atty. Malaya, of the service on them by petitioner PCIB on February 9, 1993 of its second motion for the lifting of the writ of preliminary injunction heretofore issued by the trial court. This is to enable the new counsel, Atty. Malaya, to prepare and file with dispatch the appropriate pleadings to protect the private respondents’ rights and interests.
In Gold Line Transit Inc. v. Ramos,[55][55] we ruled that litigants represented by counsel should not expect that all they need to do is sit back and relax and await the outcome of the case. They should give all the necessary assistance to their counsel, for at stake is their interest in their case. It is safe to presume that Atty. Malaya did confer with the Quisumbing Torres & Evangelista Law Office and that the private respondents turned over to their new counsel the copy of petitioner PCIB’s second motion that had been served on them. However, the private respondents, through their counsel, Atty. Malaya, failed to file any comment or opposition to the second motion of petitioner PCIB. It was not unreasonable for the RTC of Makati to assume that the private respondents would no longer file any opposition to or comment on the petitioner’s second motion, and thus resolved petitioner PCIB’s second motion.
The RTC of Makati issued its Order on February 23, 1993 granting the second motion of petitioner PCIB and lifting the writ of preliminary injunction, thus allowing the sale at public auction of the mortgaged real and personal properties. The petitioners sheriffs forthwith issued notices of the sale of the mortgaged real properties at public auction on March 30, 1993 and of the mortgaged chattels on March 18, 1993. The private respondents were served with copies of the said notices as required by law. A copy of the February 23, 1993 Order of the trial court was likewise served on them. It behooved the private respondents to file with deliberate speed their motion for the reconsideration of the February 23, 1993 Order of the trial court, or to file a supplemental complaint in Civil Case No. 91-2495 with a plea for a temporary restraining order or writ of preliminary injunction to abort the sale at public auction. The private respondents dilly-dallied and failed to do so.
What is so disconcerting is that the private respondents, through counsel, filed with the trial court on March 23, 1993 a Motion to Admit their Reply to the answer of petitioner PCIB to the complaint of the private respondents, setting the hearing of the said motion on April 2, 1993 at 8:30 a.m. or three days after the scheduled sale at public auction of the mortgaged real properties on March 30, 1993. It is incredible that the private respondents were able to file a motion to admit their reply to the answer of petitioner PCIB and yet failed to file a motion for the reconsideration of the February 23, 1993 Order of the trial court to thwart the sale at public auction of the real properties set on March 30, 1993 by the petitioners ex-officio sheriffs. The private respondents insouciantly allowed the sale at public auction of the mortgaged real properties to proceed on March 30, 1993 without a whimper of protest. Worse, the private respondents temporized and filed their emergency motion only on March 31, 1993 after the sale at public auction of the real properties with a prayer for an expanded preliminary injunction not only to thwart the sale at public auction that had already been a fait accompli but also to enjoin--
… defendants and their deputies, employees and agents from implementing the foreclosure and sheriff’s sale of 30 March 1993, including but not limited to (a) the issuance of the certificate of sale, (b) the annotation of the sheriff’s sale on Transfer Certificate of Title No. 43131, (c) the filing of any petition for a writ of possession of the subject real property, and (d) the consolidation of title in favor of defendant PCIB.[56][56]
The private respondents cannot feign ignorance of the said order of the RTC of Makati because they, through their counsel, were obliged, upon receiving the notices of sale at public auction of the mortgaged real estate and chattels, to make immediate inquiries from the office of the petitioners ex-officio sheriffs why the sale at public auction of the mortgaged properties were set when the trial court had issued a writ of preliminary injunction barring said sale. The private respondents likewise failed to consult with their counsel. For his part, the counsel of the private respondents was obliged to proceed posthaste to the RTC of Makati and ascertain if it had lifted the writ of preliminary injunction heretofore issued by it. It is reasonable to presume that the said counsel did so. For sure, the said counsel was able to confirm that the trial court had indeed issued its February 23, 1993 Order setting aside the said writ on motion of petitioner PCIB.
The private respondents even opted to split their remedies into two, by filing their petitions in separate fori, through two sets of lawyers, one remedy much later than the other, obviously to vex the petitioners and derail the placid, inexpensive and speedy administration of justice. Thus, the private respondents filed, through Atty. Malaya, a complaint for injunction with the RTC of Manila in Civil Case No. 93-65135 on March 17, 1993 on the eve of the sale at public auction of the chattels to enjoin the same. On March 31, 1993, an emergency motion was filed in the RTC of Makati in Civil Case No. 91-2495, through Quisumbing Torres & Evangelista Law Office, to enjoin the sale at public auction of the real properties earlier set on March 31, 1993, thus impelling the petitioners to litigate before the RTC of Manila in Civil Case No. 93-65135 and respond to the emergency motion of the private respondents before the RTC of Makati in which they prayed not only for the reconsideration of the February 23, 1993 Order of the RTC of Makati but even for an expanded writ of preliminary injunction.
The CA erred in holding that the private respondents did not indulge in forum shopping when they filed their complaints for injunction in the RTC of Manila in Civil Cases Nos. 93-65135 and 93-65757 despite the pendency of their complaint for injunction in Civil Case No. 91-2495 with the RTC of Makati.[57][57] The CA ratiocinated that the private respondents believed that the said complaints affected the properties situated in areas apart from those over which the RTC of Makati could act and that they had no apparent intention to procure thereby something which they had not been able to get from another court. Even a cursory reading of the complaints of the private respondents in said cases would readily show the utter untenability of the CA’s ruling. The records indicate that the private respondents filed their complaint for injunction in Civil Case No. 91-2495 and secured injunctive relief from the court to enjoin the sale of the mortgaged chattels at public auction located in the compound of the private respondents in Valenzuela (now Valenzuela City). The private respondents then believed that the RTC of Makati was the proper court from which they could secure injunctive relief to frustrate the sale at public auction of the mortgaged chattels in Valenzuela. It is incredible that the private respondents filed their complaint for injunction in the RTC of Manila to enjoin the sale of the same mortgaged chattels subject of their complaint in the RTC of Makati, on their perception that the latter court was not the proper venue to grant injunctive relief. It is clear as day that the private respondents filed their complaints in Civil Cases Nos. 93-65135 and 93-65757 for injunctive relief after the RTC of Makati set aside on February 23, 1993 the writ of preliminary injunction heretofore issued by it. In so doing, the private respondents are guilty of forum shopping.[58][58] In Bugnay Construction & Development Corporation v. Judge Laron,[59][59] we ruled that:
This rule has been equally applied in the recent case of Limpin, Jr., et al. vs. Intermediate Appellate Court, et al., where the party having filed an action in one branch of the regional trial court shops for the same remedies of a restraining order and a writ of preliminary injunction in another branch of the same court. We ruled therein that:
“So, too, what has thus far been said more than amply demonstrates Sarmiento’s and Basa’s act of forum shopping. Having failed to obtain the reliefs to which they were not entitled in the first place from the “Solano Court,” the Court of Appeals, and the Supreme Court, they subsequently instituted two (2) actions in the ‘Beltran Court’ for the same purpose, violating in the process the ruling against splitting causes of action. The sanction is inescapable: dismissal of both actions, for gross abuse of judicial processes.”
Even the private respondents belie the CA’s conclusion because in their comment on the petition at bar, they insist that they were not guilty of forum shopping for the reasons stated in the CA decision, thus:
9.1. The first case, Civil Case No. 91-2495 filed on 10 September 1991 sought mainly the restructuring of the loan agreement between the parties.
9.2. Civil Case No. 93-65135, filed on 17 March 1993 sought to enjoin the sheriff’s foreclosure sale scheduled on 18 March 1993 which violated the requirement of personal notice under Act No. 1508.
9.3. Civil Case No. 93-65757 which was filed on 3 May 1993, sought to enjoin the sheriff’s foreclosure sale scheduled on 4 May 1993 which was also violative of Act No. 1508.
9.4. Clearly, the cases arose from different sets of facts and involved different issues and incidents over which the petitioners are entitled to relief. The accusation of forum shopping is therefore baseless.[60][60]
We do not agree with the private respondents. It bears stressing that the essence of forum shopping is the filing of multiple suits involving the same parties for the same cause or action, either simultaneously or successively, for the purpose of obtaining a favorable judgment or other relief. It exists where the essential requisites of litis pendentia are present or where a final judgment in one case will amount to res judicata in another. Litis pendentia as a ground for the dismissal of an action has the following essential requisites: (a) identity or parties, or at least such parties who represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; (c) the identity with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which party is successful would amount to res judicata in the other case.[61][61] This Court ruled that where a litigant sues the same party against whom another action or actions for the alleged violations of the same right and the enforcement of the same relief is/are still pending, the defense of litis pendentia in one case is a bar to the other or others.[62][62] In such a case, the other party may ask for summary dismissal of the two cases.[63][63] The well-entrenched rule is that a party cannot by varying the form of action or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.[64][64]
In this case, the parties as well as the chattels subject of Civil Case No. 91-2495 pending in the Makati RTC and those in the Manila RTC in Civil Cases Nos. 93-65135 and 93-65757 are the same. The fifth to eighth causes of action of the private respondents in Civil Case No. 91-2495 and their causes of action in Civil Cases Nos. 93-65135 and 93-65757 complaints were for injunction with damages with a plea for injunctive relief to enjoin the sale at public auction of the said mortgaged chattels. Although the private respondents in Civil Case No. 91-2495 prayed for a restructuring of their loans with petitioner PCIB, they also sought as one of their causes of action, the nullification of the notice of sale at public auction, and the sale at public auction set on September 16, 1991 because the said notice was defective for inter alia non-compliance with Act 1508. Not only did the private respondents pray for injunctive relief to enjoin the sale at public auction of the mortgaged chattels on September 16, 1991 but also to enjoin the said sale at public auction permanently.
The private respondents cannot evade the application of the doctrine of litis pendentia in Civil Cases Nos. 93-65135 and 93-65757 on their claim that, in their complaint in the said cases, they sought for the nullification of the sales at public auction on March 18, 1993 and May 4, 1993 because of the sale of the mortgaged chattels at the private respondents’ compound in Valenzuela where the chattels were located and for failure of the petitioner sheriff of Valenzuela to serve them notice of the said sale as provided for in Act 1508.
First. If the position of the private respondents was correct, their remedy was to file a supplemental complaint in Civil Case No. 91-2495 and not a separate complaint in Civil Case No. 93-65135. It bears stressing that the action in Civil Case No. 91-2495 did not become functus officio with the lifting of the writ of preliminary injunction issued by the said court.[65][65] Hence, the private respondents should have filed in Civil Case No. 91-2495 a supplemental complaint or a motion for reconsideration with the Makati RTC for the reconsideration of its February 23, 1993 Order.
Second. The claim of the private respondents is but an afterthought, a sinister scheme to give a semblance of justification for their plea for injunctive relief in the RTC of Manila. The records show that the petitioner sheriff of the RTC of Valenzuela served a copy of the notice of sheriff’s sale of the chattels set on September 16, 1991 on the private respondents. Moreover, the petitioner sheriff of Valenzuela stated that the sale at public auction would be held at the compound of the private respondents in Valenzuela where the said chattels were stored.[66][66] If the private respondents believed that the sale of the chattels at their compound was a violation of Act 1508, they should have questioned the said sale in their complaint in Civil Case No. 91-2495. They did not. They did so, for the first time, only in their complaint in Civil Case No. 93-65135. In Florendo v. Vda. De Gonzalez,[67][67] we held that “if a party is allowed to urge one ground at a time, or even all grounds except one or two, it would result in piecemeal and endless litigation which the law seeks to avoid.”[68][68] Moreover, the private respondents had agreed, under the chattel mortgages, that the sale at public auction may be held at any place where the chattels may be found:
12. The auction sale of the mortgaged properties may be held, at the Mortgagee’s option, at Makati, the place where the Mortgagee’s branch mentioned above is situated, or the place where the mortgaged property may be found. In case of judicial foreclosure, the action for foreclosure may be filed, at the Mortgagee’s option, in the Court of First Instance for Makati, Metro Manila.[69][69]
In this case, the RTC of Makati had assumed jurisdiction over the foreclosure of the mortgaged real properties and chattels including all incidents related to the conduct and actuations of the sheriffs thereof.[70][70] The February 23, 1993 Order of the RTC of Makati lifting the writ of preliminary injunction heretofore issued by it and allowing the sale at public auction of the personal properties by the petitioners sheriffs after petitioner PCIB had posted the requisite bond was an interlocutory order; hence, always under the control of the said court; the order may be modified and rescinded by it upon sufficient grounds shown at any time before judgment. The trial court had the inherent power to control its processes and orders so as to make them conformable to law and justice.[71][71] Thus, it behooved the private respondents to file their motion with the RTC of Makati for the reconsideration of its February 23, 1993 Order or file a supplemental complaint in Civil Case No. 91-2495 instead of filing two separate complaints one after another, docketed as Civil Case Nos. 93-65135 and 93-65757, with two different branches of the court, praying for injunctive relief to enjoin the sale at public auction of the mortgage chattels as decreed by the RTC of Makati per its February 23, 1993 Order, otherwise the private respondents may correctly be declared as indulging in forum shopping.[72][72] After all, the ex-officio sheriff of Valenzuela was one of the respondents before the RTC of Makati over whom and over whose actuations the said court had supervision and control. Even if the said sheriff failed to comply with Act 1508 in setting the sale at public auction of the mortgaged chattels, the RTC of Makati had jurisdiction to order the said sheriff to comply with the law.[73][73]
The private respondents even brazenly violated the principle of judicial stability, which essentially states that the judgment or order of a court of competent jurisdiction may not be interfered with by any court of concurrent jurisdiction for the simple reason that the power to open, modify or vacate the said judgment or order is not only possessed but is restricted to the court in which the judgment or order is rendered or issued. Accordingly, no court has the power to interfere by injunction with the judgment or decrees of a court of concurrent jurisdiction having the power to grant relief sought by injunction. The various branches of the RTC having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction should not, cannot and are not permitted to intervene with their respective cases, much less with their orders or judgments. A contrary rule would lead to confusion, and seriously hamper the administration of justice.[74][74]
The private respondents filed on March 17, 1993 their complaint with the RTC of Manila in Civil Case No. 93-65135 for injunction with a plea for a temporary restraining order and writ of preliminary injunction to enjoin only the sale at public auction of the chattels on March 18, 1993, despite the admission made in their complaint that the RTC of Makati had already enjoined the said sale at public auction. The private respondents did not allege in its complaint that the RTC of Makati had lifted the said writ heretofore issued by it. Because of the temporary restraining order issued by the RTC of Manila, the sale at public auction of the chattels on March 18, 1993 had to be reset. What the RTC of Makati allowed in its February 23, 1993 Order, the RTC of Manila enjoined, via the issuance of the temporary restraining order prayed for by the private respondents. The sale at public auction had to be reset to May 4, 1993 only to be stymied anew when the private respondents filed another complaint docketed as Civil Case No. 93-65757 with the RTC of Manila on May 3, 1993, praying for a temporary restraining order and writ of preliminary injunction to enjoin the said sale at public auction. The private respondents admitted in their complaint that their emergency motion for the reconsideration of the February 23, 1993 Order of the RTC of Makati was still unresolved. Moreover, at the time the private respondents filed their complaint in Civil Case No. 93-65757, the Order of the RTC of Manila in Civil Case No. 65135 had not yet become final and executory. The petitioner sheriff had to reset the said sale on June 14, 1993 when the RTC of Manila issued in Civil Case No. 93-65757 another temporary restraining order. Although the sale at public auction of the chattels had been enjoined by the RTC of Manila in Civil Case No. 93-65757, the private respondents filed their petition for certiorari and prohibition with a plea for a temporary restraining order or writ of preliminary injunction to enjoin the sale of the mortgaged chattels at public auction on June 14, 1993. In fine, the private respondents sought injunctive relief from the CA to enjoin the sale at public auction of the chattels on June 14, 1993 despite the pendency of their complaint with the RTC of Manila in Civil Case No. 93-65757, praying for the same injunctive relief. The private respondents were able to frustrate the February 23, 1993 Order of the RTC of Makati not only once but three times, through temporary restraining orders issued by the RTC of Manila, and through the assailed decision of the CA. The two branches of the RTC of Manila saw through the nefarious ploy of the private respondents and issued separate orders dismissing the complaints on the ground of litis pendentia, forum shopping, and violation of the principle of judicial stability. We note that the RTC of Manila in Civil Case No. 93-65757 even directed the private respondents to pay jointly and severally to the petitioners treble costs, and gave the petitioners the option to initiate disciplinary action against the counsel of the private respondents. The private respondents did not even appeal the order of the two branches of the RTC of Manila.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 31251 is REVERSED AND SET ASIDE. The complaint of the private respondents in Civil Case No. 91-2495 is DISMISSED WITH PREJUDICE.
This is without prejudice to the liability for contempt of the counsels for the private respondents for violation of the Supreme Court Circular No. 28-91 on forum shopping, as may be determined by the trial courts concerned.
Costs against the private respondents.
SO ORDERED.
Bellosillo, (Chairman), Austria-Martinez, and Tinga, JJ., concur.
Quisumbing, J., on official leave.
[1][1] Penned by Associate Justice Cezar D. Francisco, with Associate Justices Gloria C. Paras and Buenaventura J. Guerrero concurring.
[2][2] Presided by Judge Teofilo Guadiz, Jr.
[3][3] Records, pp. 128-139.
[4][4] Presided by Judge Teofilo Guadiz, Jr.
[5][5] Annex “J,” Petition.
[6][6] Annex “K,” Petition.
[7][7] Entitled and docketed as Philippine Commercial International Bank v. Hon. Teofilo Guadiz, Jr., et al., CA-G.R. No. 27573 (SP).
[8][8] Rollo, p. 352.
[9][9] Penned by Justice Asaali S. Isnani, with Justices Gloria C. Paras and Ricardo P. Galvez concurring.
[10][10] Rollo, pp. 323-331.
[11][11] Id. at 332.
[12][12] Annex “M,” Petition.
[13][13] Rollo, p. 349.
[14][14] Id. at 350-351.
[15][15] Id. at 351.
[16][16] Annex “N,” Petition.
[17][17] Rollo, p. 205.
[18][18] Id. at 360-361.
[19][19] Id. at 362-364.
[20][20] Id. at 366-367.
[21][21] Id. at 293.
[22][22] Id. at 368-369.
[23][23] Id. at 471.
[24][24] Entitled and docketed as Ley Construction & Development Corporation, et al. v. Ex-Officio Sheriff of the Regional Trial Court of Valenzuela, et al., Civil Case No. 93-65153.
[25][25] Annex “P-1,” Petition.
[26][26] Presided by Judge Cesar V. Alejandria.
[27][27] Rollo, 370-371.
[28][28] Id. at 374-383.
[29][29] Id. at 381-382.
[30][30] Id. at 327-380.
[31][31] CA Rollo, pp. 137-143.
[32][32] Rollo, at 414-420.
[33][33] Presided by Judge Emilio L. Leachon, Jr.
[34][34] Rollo, pp. 651-653.
[35][35] Id. at 654-655.
[36][36] Id. at 655.
[37][37] Annex “P-2,” Petition.
[38][38] Id. at 254.
[39][39] Entitled Ley Construction & Development Corporation, et al. v. Ex-Officio Sheriff of the Regional Trial Court of Valenzuela, et al., Civil Case No. 93-65757.
[40][40] Presided by Judge Manuel T. Muro.
[41][41] Rollo, pp. 256-257.
[42][42] CA Rollo, p. 155.
[43][43] Rollo, p. 648.
[44][44] Annex “Q-2,” Petition.
[45][45] Annex “S-1,” Petition.
[46][46] Rollo, p. 728.
[47][47] Id. at 732-739.
[48][48] Primarily for the nullification of the sale at public auction set on March 18, 1993 for failure of the ex-officio sheriff to comply with the mandates of Act No. 1508 (The Chattel Mortgage Law).
[49][49] For the nullification of the sale at public auction of the properties mortgaged by the private respondents as security for their loans on the ground that the extrajudicial foreclosure of the said mortgages by petitioner PCIB was premature and for the restructuring of their loans with the said petitioner.
[51][51] 302 SCRA 362 (1999).
[52][52] 275 SCRA 413 (1997).
[53][53] Philhouse Development Corporation v. Consolidated Orix Leasing & Financing Corporation, 356 SCRA 281 (2001).
[54][54] Development Bank of the Philippines v. Court of Appeals, supra.
[55][55] 363 SCRA 262 (2001).
[56][56] Rollo, pp. 381-382.
[57][57] To prevent Forum Shopping, the Supreme Court issued Circular No. 28-91 as follows:
Subject: Additional requisites for Petitions filed with the Supreme Court and the Court of Appeals to Prevent Forum Shopping or Multiple Filing of Petitions and Complaints.
The attention of the Court has been called to the filing of multiple petitions and complaints involving the same issues in the Supreme Court, the Court of Appeals or different Divisions thereof, or any other tribunal or agency, with the result that said tribunals or agency have to resolve the same issues.
To avoid the foregoing, every petition or complaint filed with the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, shall comply with the following requirements aside from pertinent provisions of the Rules of Courts and existing circulars:
1. Caption of petition or complaint – The caption of the petition or complaint must include the docket number of the case in the lower court or quasi-judicial agency whose order or judgment is sought to be reviewed.
2. Certification – The party must certify under oath that he has not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or different Divisions thereof, or any other tribunal or agency. If there is any other action pending he must state the status of the same. If he should learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or different Divisions thereof, or any other tribunal or agency, he should notify the court, tribunal or agency within five (5) days from such notice.
3. Penalties. --
a) Any violation of this Circular shall be a cause for the summary dismissal of the multiple petition or complaint;
b) Any willful and deliberate forum shopping by any party and his lawyer with the filing of multiple petitions or complaints to ensure favorable action shall constitute direct contempt of court.
c) The submission of a false certification under Par. 2 of the Circular shall likewise constitute contempt of court without prejudice to filing of criminal action against the guilty party. The lawyer may also be subjected to disciplinary proceedings.
4. Effectivity Date. – This Circular shall take effect on Jan. 1, 1992. The Circular has been incorporated in the 1997 Rules of Civil Procedure as Section 5, Rule 7.
[58][58] Fil-Estate Gold and Development, Inc. v. Court of Appeals, 265 SCRA 614 (1996).
[59][59] 176 SCRA 240 (1989).
[60][60] Rollo, pp. 702-703.
[63][63] First Philippine International Bank v. Court of Appeals, 252 SCRA 259 (1996).
[64][64] Ibabao v. Intermediate Appellate Court, 150 SCRA 76 (1987).
[65][65] Palm Avenue Realty Development Corporation v. Presidential Commission on Good Government, 153 SCRA 579 (1987); First Philippine International Bank v. Court of Appeals, supra.
[66][66] In Manhattan v. Checker, 171 N.E., 705 (1930), Mr. Chief Justice Benjamin Cardozo of the Circuit Appeals Court of New York stated that a sale at public auction is effected where the property sought to be sold is at hand and within the view of those attending. It is the essence of an auction that there shall be full and free opportunity for competition among bidders. A sale at public auction may be made at the place where the chattel is located as long as the notice of sale states the place where the chattel is found and to be sold.
[67][67] 87 Phil. 638.
[68][68] Cited in Salido v. Court of Appeals, 173 SCRA 429 (1989).
[69][69] Rollo, p. 121.
[70][70] PNB v. Pineda, 197 SCRA 1 (1991).
[71][71] Ley Construction & Development Corporation v. Union Bank of the Philippines, 334 SCRA 443 (2000).
[72][72] Silahis International Hotel, Inc. v. NLRC, 225 SCRA 94 (1993); PNB v. Pineda, supra.
[73][73] PNB v. Pineda, supra.
[74][74] Cojuangco v. Villegas, 184 SCRA 374 (1999).
G.R. No. 156034 October 1, 2003
DELSAN TRANSPORT LINES, INC., petitioner,
vs.
C & A construction, inc., respondent.
vs.
C & A construction, inc., respondent.
D E C I S I O N
YNARES-SANTIAGO, J.:
Assailed in this petition for review under Rule 45 of the Revised Rules of Court are the June 14, 2002 decision1 of the Court of Appeals in CA-G.R. CV No. 59034, which reversed the decision2 of the Regional Trial Court of Manila, Branch 46, in Civil Case No. 95-75565, and its November 7, 2002 resolution3 denying petitioner’s motion for reconsideration.
The undisputed facts reveal that respondent C & A Construction, Inc. was engaged by the National Housing Authority (NHA) to construct a deflector wall at the Vitas Reclamation Area in Vitas, Tondo, Manila.4 The project was completed in 1994 but it was not formally turned over to NHA.
On October 9, 1994, M/V Delsan Express, a ship owned and operated by petitioner Delsan Transport Lines, Inc., anchored at the Navotas Fish Port for the purpose of installing a cargo pump and clearing the cargo oil tank. At around 12:00 midnight of October 20, 1994, Captain Demetrio T. Jusep of M/V Delsan Express received a report from his radio head operator in Japan5 that a typhoon was going to hit Manila6 in about eight (8) hours.7 At approximately 8:35 in the morning of October 21, 1994, Capt. Jusep tried to seek shelter at the North Harbor but could not enter the area because it was already congested.8 At 10:00 a.m., Capt. Jusep decided to drop anchor at the vicinity of Vitas mouth, 4 miles away from a Napocor power barge. At that time, the waves were already reaching 8 to 10 feet high. Capt. Jusep ordered his crew to go full ahead to counter the wind which was dragging the ship towards the Napocor power barge. To avoid collision, Capt. Jusep ordered a full stop of the vessel.9 He succeeded in avoiding the power barge, but when the engine was re-started and the ship was maneuvered full astern, it hit the deflector wall constructed by respondent.10 The damage caused by the incident amounted to P456,198.24.11
Respondent demanded payment of the damage from petitioner but the latter refused to pay. Consequently, respondent filed a complaint for damages with the Regional Trial Court of Manila, Branch 46, which was docketed as Civil Case No. 95-75565. In its answer, petitioner claimed that the damage was caused by a fortuitous event.12
On February 13, 1998, the complaint filed by respondent was dismissed. The trial court ruled that petitioner was not guilty of negligence because it had taken all the necessary precautions to avoid the accident. Applying the "emergency rule", it absolved petitioner of liability because the latter had no opportunity to adequately weigh the best solution to a threatening situation. It further held that even if the maneuver chosen by petitioner was a wrong move, it cannot be held liable as the cause of the damage sustained by respondent was typhoon "Katring", which is an act of God.13
On appeal to the Court of Appeals, the decision of the trial court was reversed and set aside.14 It found Capt. Jusep guilty of negligence in deciding to transfer the vessel to the North Harbor only at 8:35 a.m. of October 21, 1994 and thus held petitioner liable for damages.
Hence, petitioner filed the instant petition contending that Capt. Jusep was not negligent in waiting until 8:35 in the morning of October 21, 1994 before transferring the vessel to the North Harbor inasmuch as it was not shown that had the transfer been made earlier, the vessel could have sought shelter.15 It further claimed that it cannot be held vicariously liable under Article 2180 of the Civil Code because respondent failed to allege in the complaint that petitioner was negligent in the selection and supervision of its employees.16 Granting that Capt. Jusep was indeed guilty of negligence, petitioner is not liable because it exercised due diligence in the selection of Capt. Jusep who is a duly licensed and competent Master Mariner.17
The issues to be resolved in this petition are as follows – (1) Whether or not Capt. Jusep was negligent; (2) If yes, whether or not petitioner is solidarily liable under Article 2180 of the Civil Code for the quasi-delict committed by Capt. Jusep?
Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. The test for determining the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use the reasonable care and caution which an ordinary prudent person would have used in the same situation? If not, then he is guilty of negligence.18
In the case at bar, the Court of Appeals was correct in holding that Capt. Jusep was negligent in deciding to transfer the vessel only at 8:35 in the morning of October 21, 1994. As early as 12:00 midnight of October 20, 1994, he received a report from his radio head operator in Japan19 that a typhoon was going to hit Manila20 after 8 hours.21 This, notwithstanding, he did nothing, until 8:35 in the morning of October 21, 1994, when he decided to seek shelter at the North Harbor, which unfortunately was already congested. The finding of negligence cannot be rebutted upon proof that the ship could not have sought refuge at the North Harbor even if the transfer was done earlier. It is not the speculative success or failure of a decision that determines the existence of negligence in the present case, but the failure to take immediate and appropriate action under the circumstances. Capt. Jusep, despite knowledge that the typhoon was to hit Manila in 8 hours, complacently waited for the lapse of more than 8 hours thinking that the typhoon might change direction.22 He cannot claim that he waited for the sun to rise instead of moving the vessel at midnight immediately after receiving the report because of the difficulty of traveling at night. The hour of 8:35 a.m. is way past sunrise. Furthermore, he did not transfer as soon as the sun rose because, according to him, it was not very cloudy23 and there was no weather disturbance yet.24
When he ignored the weather report notwithstanding reasonable foresight of harm, Capt. Jusep showed an inexcusable lack of care and caution which an ordinary prudent person would have observed in the same situation.25 Had he moved the vessel earlier, he could have had greater chances of finding a space at the North Harbor considering that the Navotas Port where they docked was very near North Harbor.26 Even if the latter was already congested, he would still have time to seek refuge in other ports.
The trial court erred in applying the emergency rule. Under this rule, one who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the danger in which he finds himself is brought about by his own negligence.27 Clearly, the emergency rule is not applicable to the instant case because the danger where Capt. Jusep found himself was caused by his own negligence.
Anent the second issue, we find petitioner vicariously liable for the negligent act of Capt. Jusep.1awphi1.nét Under Article 2180 of the Civil Code an employer may be held solidarily liable for the negligent act of his employee. Thus –
Art. 2180. The obligation imposed in Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
x x x x x x x x x
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.
x x x x x x x x x
The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.
Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. 28
There is no question that petitioner, who is the owner/operator of M/V Delsan Express, is also the employer of Capt. Jusep who at the time of the incident acted within the scope of his duty. The defense raised by petitioner was that it exercised due diligence in the selection of Capt. Jusep because the latter is a licensed and competent Master Mariner. It should be stressed, however, that the required diligence of a good father of a family pertains not only to the selection, but also to the supervision of employees. It is not enough that the employees chosen be competent and qualified, inasmuch as the employer is still required to exercise due diligence in supervising its employees.
In Fabre, Jr. v. Court of Appeals,29 it was held that due diligence in supervision requires the formulation of rules and regulations for the guidance of employees and the issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules. Corollarily, in Ramos v. Court of Appeals,30 the Court stressed that once negligence on the part of the employees is shown, the burden of proving that he observed the diligence in the selection and supervision of its employees shifts to the employer.
In the case at bar, however, petitioner presented no evidence that it formulated rules/guidelines for the proper performance of functions of its employees and that it strictly implemented and monitored compliance therewith. Failing to discharge the burden, petitioner should therefore be held liable for the negligent act of Capt. Jusep.
So also, petitioner cannot disclaim liability on the basis of respondent’s failure to allege in its complaint that the former did not exercise due diligence in the selection and supervision of its employees. In Viron Transportation Co., Inc. v. Delos Santos,31 it was held that it is not necessary to state that petitioner was negligent in the supervision or selection of its employees, inasmuch as its negligence is presumed by operation of law. Allegations of negligence against the employee and that of an employer-employee relation in the complaint are enough to make out a case of quasi-delict under Article 2180 of the Civil Code.32
Considering that petitioner did not assail the damages awarded by the trial court, we find no reason to alter the same. The interest imposed should, however, be modified. In Eastern Shipping Lines, Inc. v. Court of Appeals,33 it was held that the rate of interest on obligations not constituting a loan or forbearance of money is six percent (6%) per annum. If the purchase price can be established with certainty at the time of the filing of the complaint, the six percent (6%) interest should be computed from the date the complaint was filed until finality of the decision. After the judgment becomes final and executory until the obligation is satisfied, the amount due shall earn interest at 12% per year, the interim period being deemed equivalent to a forbearance of credit.34
Accordingly, the amount of P456,198.27 due the respondent shall earn 6% interest per annum from October 3, 1995 until the finality of this decision. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED.1awphi1.nét The June 14, 2002 decision of the Court of Appeals in CA-G.R. CV No. 59034 ordering petitioner Delsan Transport Lines, Inc., to pay respondent C & A Construction, Inc., damages in the amount of P456,198.27, plus P30,000.00 as attorney’s fees, is AFFIRMED with the MODIFICATION that the award of P456,198.27 shall earn interest at the rate of 6% per annum from October 3, 1995, until finality of this decision, and 12% per annum thereafter on the principal and interest (or any part thereof) until full payment.
SO ORDERED.
Vitug, and Carpio, JJ., concur.
Davide, Jr., C.J., (Chairman), no part; was former counsel of party.
Azcuna, J., on leave.
G.R. No. 131588 March 27, 2001
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
GLENN DE LOS SANTOS, accused-appellant.
vs.
GLENN DE LOS SANTOS, accused-appellant.
DAVIDE, JR., J.:
One may perhaps easily recall the gruesome and tragic event in Cagayan de Oro City, reported over print and broadcast media, which claimed the lives of several members of the Philippine National Police (PNP) who were undergoing an "endurance run" as part of the Special Counter Insurgency Operation Unit Training. Not much effort was spared for the search of the one responsible therefor, as herein accused-appellant Glenn de los Santos (hereafter GLENN) immediately surrendered to cal authorities. GLENN was then charged with the crimes of Multiple Murder, Multiple Frustrated Murder, and Multiple Attempted Murder in an information filed with the Regional Trial Court of Cagayan de Oro City. The information reads as follows:
That on or about October 05, 1995, in the early morning, at Maitum Highway, within Barangay Puerto, Cagayan de Oro City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with deliberate intent to kill, taking advantage of his driven motor vehicle, an Isuzu Elf, and with treachery, did then and there willfully, unlawfully and feloniously kill and inflict mortal wounds from … behind in a sudden and unexpected manner with the use of said vehicle … members of the Philippine National Police (PNP), undergoing a Special Training Course (Scout Class 07-95), wearing black T-shirts and black short pants, performing an "Endurance Run" of 35 kilometers coming from their camp in Manolo Fortich, Bukidnon, heading to Regional Training Headquarters in Camp Alagar, Cagayan de Oro City, running in a column of 3, with a distance of two feet, more or less, from one trainee to another, thus forming a [sic] three lines, with a length of more or less 50 meters from the 1st man to the last man, unable to defend themselves, because the accused ran or moved his driven vehicle on the direction of the backs of the PNP joggers in spite of the continuous warning signals made by six of the joggers, namely: PO1 Allan Tabacon Espana, Waldon Sinda Sacro, Lemuel Ybanez Pangca, Artemio Jamil Villaflor, Nardo Omasas Collantes and Joselito Buyser Escartin, who were at the rear echelon of said run, acting as guards, by continuously waving their hands at the accused for him to take the left lane of the highway, going to the City proper, from a distance of 100 meters away from the jogger’s rear portion, but which accused failed and refused to heed; instead, he proceeded to operate his driven vehicle (an Isuzu Elf) on high speed directly towards the joggers, thus forcing the rear hitting, bumping, or ramming the first four (4) victims, causing the bodies to be thrown towards the windshields of said Isuzu Elf, breaking said windshield, and upon being aware that bodies of the victims flew on the windshield of his driven vehicle, instead of applying his brake, continued to travel on a high speed, this time putting off its headlights, thus hitting the succeeding joggers on said 1st line, as a result thereof the following were killed on the spot:
1. Vincent Labis Rosal | 7. Antonio Flores Lasco |
2. Allan Amoguis Abis | 8. Igmedio Salinas Lituanas |
3. Jose Arden M. Atisa | 9. Roberto Cabussao Loren |
4. Nathaniel Mugot Baculio | 10. Raul Plaza Martinez |
5. Romil Gosila Legrano | 11. Jerry Pedrosa Pajo |
6. Arnulfo Limbago Jacutin | 12. Rolando Paremcio Pancito |
While another trainee/victim, Antonio Palomino Mino, died few days after the incident, while the following eleven (11) other trainee/victims were seriously wounded, the accused thus performing all the acts of execution which would produce the crime of Murder as a consequence but nevertheless did not produce it by reason of some cause other than said accused’s spontaneous desistance, that is, by the timely and able medical assistance rendered on the following victims which prevented their death, to wit:
1. Rey Go Boquis | 7. Melchor Hinlo |
2. Rene Tuako Calabria | 8. Noel Ganzan Oclarit |
3. Nonata Ibarra Erno | 9. Charito Penza Gepala |
4. Rey Tamayo Estofil | 10. Victor Malicse Olavo |
5. Joel Rey Migue Galendez | 11. Bimbo Glade Polboroza |
6. Arman Neri Hernaiz |
While the following Police Officers I (POI) sustained minor injuries, to wit:
1. Romanito Andrada | 6. Romualdo Cotor Dacera |
2. Richard Canoy Caday | 7. Ramil Rivas Gaisano |
3. Rey Cayusa | 8. Dibangkita Magandang |
4. Avelino Chua | 9. Martin Olivero Pelarion |
5. Henry Gadis Coubeta | 10. Flordicante Martin Piligro |
After which said accused thereafter escaped from the scene of the incident, leaving behind the victims afore-enumerated helpless.
Contrary to Article 248, in relation to Article 6 of the Revised Penal Code.
The evidence for the prosecution disclose that the Special Counter Insurgency Operation Unit Training held at Camp Damilag, Manolo Fortich, Bukidnon, started on 1 September 1995 and was to end on 15 October 1995. The last phase of the training was the "endurance run" from said Camp to Camp Alagar, Cagayan de Oro City. The run on 5 October 1995 started at 2:20 a.m. The PNP trainees were divided into three columns; the first and second of which had 22 trainees each, and the third had 21. The trainees were wearing black T-shirts, black short pants, and green and black combat shoes. At the start of the run, a Hummer vehicle tailed the jogging trainees. When they reached Alae, the driver of the Hummer vehicle was instructed to dispatch advanced security at strategic locations in Carmen Hill. Since the jogging trainees were occupying the right lane of the highway, two rear security guards were assigned to each rear column. Their duty was to jog backwards facing the oncoming vehicles and give hand signals for other vehicles to take the left lane.1
Prosecution witnesses Lemuel Y. Pangca and Weldon Sacro testified that they were assigned as rear guards of the first column. They recalled that from Alae to Maitum Highway, Puerto, Cagayan de Oro City, about 20 vehicles passed them, all of which slowed down and took the left portion of the road when signaled to do so.2
While they were negotiating Maitum Highway, they saw an Isuzu Elf truck coming at high speed towards them. The vehicle lights were in the high beam. At a distance of 100 meters, the rear security guards started waving their hands for the vehicle to take the other side of the road, but the vehicle just kept its speed, apparently ignoring their signals and coming closer and closer to them. Realizing that the vehicle would hit them, the rear guards told their co-trainees to "retract." The guards forthwith jumped in different directions. Lemuel and Weldon saw their co-trainees being hit by the said vehicle, falling like dominoes one after the other. Some were thrown, and others were overrun by the vehicle. The driver did not reduce his speed even after hitting the first and second columns. The guards then stopped oncoming vehicles to prevent their comrades from being hit again.3
The trial court judge, together with the City Prosecutor, GLENN and his counsel, conducted an ocular inspection of the place where the incident happened. They then proceeded to inspect the Isuzu Elf at the police station. The City Prosecutor manifested, thus:
The vehicle which we are now inspecting at the police station is the same vehicle which [was] involved in the October 5, 1995 incident, an Isuzu Elf vehicle colored light blue with strips painting along the side colored orange and yellow as well as in front. We further manifest that … the windshield was totally damaged and 2/3 portion of the front just below the windshield was heavily dented as a consequence of the impact. The lower portion was likewise damaged more particularly in the radiator guard. The bumper of said vehicle was likewise heavily damaged in fact there is a cut of the plastic used as a bumper; that the right side of the headlight was likewise totally damaged. The front signal light, right side was likewise damaged. The side mirror was likewise totally damaged. The height of the truck from the ground to the lower portion of the windshield is 5 ft. and the height of the truck on the front level is 5 ft.4
PO3 Jose Cabugwas testified that he was assigned at the Investigation Division at Precinct 6, Cagayan de Oro City, and that at 4 a.m. of 5 October 1995, several members of the PNP came to their station and reported that they had been bumped by a certain vehicle. Immediately after receiving the report, he and two other policemen proceeded to the traffic scene to conduct an ocular inspection. Only bloodstains and broken particles of the hit-and-run vehicle remained on the highway. They did not see any brake marks on the highway, which led him to conclude that the brakes of the vehicle had not been applied. The policemen measured the bloodstains and found them to be 70 ft. long.5
GLENN’s version of the events that transpired that evening is as follows:
At about 10:30 p.m. of 4 October 1995, he was asked by his friend Enting Galindez and the latter’s fellow band members to provide them with transportation, if possible an Isuzu Forward, that would bring their band instruments, band utilities and band members from Macasandig and Corrales, Cagayan de Oro City, to Balingoan. From there, they were supposed to be taken to Mambajao, Camiguin, to participate in the San Miguel-sponsored "Sabado Nights" of the Lanzones Festival from 5-7 October 1995. It was the thirteenth time that Enting had asked such a favor from him.6 Since the arrangement was to fetch Galindez and his group at 4:00 a.m. of 5 October 1995, GLENN immediately went to Cugman, Cagayan de Oro City, to get his Isuzu Elf truck. After which, he proceeded back to his house at Bugo, Cagayan de Oro City, and told his wife that he would go to Bukidnon to get his aunt’s Isuzu Forward truck because the twenty band members and nine utilities and band instruments could not be accommodated in the Isuzu Elf truck. Three of his friends asked to go along, namely, Roldan Paltonag, Andot Peña, and a certain Akut.7
After leaving GLENN’s house, the group decided to stop at Celebrity Plaza Restaurant. GLENN saw his "kumpare" Danilo Cosin and the latter’s wife, and joined them at the table. GLENN finished three bottles of pale pilsen beer. When the Cosin spouses left, GLENN joined his travelling companions at their table. The group left at 12:00 midnight for Bukidnon. The environment was dark and foggy, with occasional rains. It took them sometime looking for the Isuzu Forward truck. Finally, they saw the truck in Agusan Canyon. Much to their disappointment, the said truck had mechanical problems. Hence, GLENN decided to go back to Cagayan de Oro City to tell Enting that they would use the Isuzu Elf truck instead.8
GLENN drove slowly because the road was slippery. The vicinity was dark: there was no moon or star; neither were there lampposts. From the Alae junction, he and his companions used the national highway, traversing the right lane going to Cagayan de Oro City. At the vicinity of Mambatangan junction, as the Elf was negotiating a left curve going slightly downward, GLENN saw a very bright and glaring light coming from the opposite direction of the national highway. GLENN blinked his headlights as a signal for the other driver to switch his headlights from bright to dim. GLENN switched his own lights from bright to dim and reduced his speed from 80 to 60 kilometers per hour. It was only when the vehicles were at a distance of 10 to 15 meters from each other that the other car’s headlights were switched from bright to dim. As a result, GLENN found it extremely hard to adjust from high brightness to sudden darkness.9
It was while the truck was still cruising at a speed of 60 km./hr., and immediately after passing the oncoming vehicle, that GLENN suddenly heard and felt bumping thuds. At the sound of the first bumping thuds, GLENN put his right foot on the brake pedal. But the impact was so sudden that he was astonished and afraid. He was trembling and could not see what were being bumped. At the succeeding bumping thuds, he was not able to pump the brake, nor did he notice that his foot was pushing the pedal. He returned to his senses only when one of his companions woke up and said to him: "Gard, it seems we bumped on something. Just relax, we might all die." Due to its momentum, the Elf continued on its track and was able to stop only when it was already very near the next curve.10
GLENN could not distinguish in the darkness what he had hit, especially since the right headlights of the truck had been busted upon the first bumping thuds. In his confusion and fear, he immediately proceeded home. GLENN did not report the incident to the Puerto Police Station because he was not aware of what exactly he had hit. It was only when he reached his house that he noticed that the grill of the truck was broken; the side mirror and round mirror, missing; and the windshield, splintered. Two hours later, he heard on Bombo Radyo that an accident had occurred, and he realized that it was the PNP group that he had hit. GLENN surrendered that same day to Governor Emano.11
The defense also presented Crescente Galindez, as well as Shirley Almazan of the PAG-ASA Office, Cagayan de Oro City. The former testified that when he went to GLENN’s house at about 10:00 p.m. of 4 October 1995, there was heavy rain; and at 12:00 midnight, the rain was moderate. He corroborated GLENN’s testimony that he (Cerscente) went to GLENN’s house that evening in order to hire a truck that would bring the band instruments, band utilities and band members from Cagayan de Oro to Camiguin for the Lanzones Festival.12 Almazan, on the other hand, testified that based on an observed weather report within the vicinity of Cagayan de Oro City, there was rain from 8:00 p.m. of October 1995 to 2:00 a.m. the next day; and the sky was overcast from 11:00 p.m. of 4 October 1995 to 5:00 a.m. of 5 October 1995. What she meant by "overcast" is that there was no break in the sky; and, definitely, the moon and stars could not be seen.13
The prosecution presented rebuttal witness Danilo Olarita whose house was just 100 meters away from the place where the incident occurred. He testified that he was awakened on that fateful night by a series of loud thuds. Thereafter, a man came to his house and asked for a glass of water, claiming to have been hit by a vehicle. Danilo further stated that the weather at the time was fair, and that the soil was dry and not muddy.14
In its decision of 26 August 1997, the trial court convicted GLENN of the complex crime of multiple murder, multiple frustrated murder and multiple attempted murder, with the use of motor vehicle as the qualifying circumstance. It sentenced him to suffer the penalty of death and ordered him to indemnify each group of the heirs of the deceased in the amount of P75,000; each of the victims of frustrated murder in the amount of P30,000; and each of the victims of attempted murder in the amount of P10,000.
Hence, this automatic review, wherein GLENN contends that the trial court erred (a) in finding that he caused the Isuzu Elf truck to hit the trainees even after seeing the rear guards waving and the PNP trainees jogging; (b) in finding that he caused the truck to run even faster after noticing the first thuds; and (c) in finding that he could still have avoided the accident from a distance of 150 meters, despite the bright and glaring light from the oncoming vehicle.
In convicting GLENN, the trial court found that "the accused out of mischief and dare-devilness [sic], in the exhilaration of the night breeze and having dr[u]nk at least three bottles of beer earlier, merely wanted to scare the rear guard[s] and see them scamper away as they saw him and his vehicle coming at them to ram them down."15
Likewise, the OSG posits that "the evil motive of the appellant in injuring the jogging trainees was probably brought by the fact that he had dr[u]nk a total of three (3) bottles of beer earlier before the incident."16
Not to be outdone, the defense also advances another speculation, i.e., "the possibility that [GLENN] could have fallen asleep out of sheer fatigue in that unholy hour of 3:30 in the early morning, and thus was not able to stop his Isuzu Elf truck when the bumping thuds were occurring in rapid succession; and after he was able to wake up upon hearing the shout of his companions, it was already too late, as the bumping thuds had already occurred."17
Considering that death penalty is involved, the trial court should have been more scrupulous in weighing the evidence. It we are to subscribe to the trial court’s finding that GLENN must have merely wanted to scare the rear guards, then intent to kill was wanting. In the absence of a criminal intent, he cannot be held liable for an intentional felony. All reasonable doubt intended to demonstrate negligence, and not criminal intent, should be indulged.18
From the convergence of circumstances, we are inclined to believe that the tragic event was more a product of reckless imprudence than of a malicious intent on GLENN’s part.
First, as testified to by prosecution rebuttal witness Danilo Olarita, the place of the incident was "very dark," as there was no moon. And according to PAG-ASA’s observed weather report within the vicinity of Cagayan de Oro City covering a radius of 50 kilometers, at the time the event took place, the sky was overcast, i.e., there was absolutely no break in the thick clouds covering the celestial dome globe; hence, there was no way for the moon and stars to be seen. Neither were there lampposts that illuminated the highway.1âwphi1.nêt
Second, the jogging trainees and the rear guards were all wearing black T-shirts, black short pants, and black and green combat shoes, which made them hard to make out on that dark and cloudy night. The rear guards had neither reflectorized vests or gloves nor flashlights in giving hand signals.
Third, GLENN was driving on the proper side of the road, the right lane. On the other hand, the jogging trainees were occupying the wrong lane, the same lane as GLENN’s vehicle was traversing. Worse, they were facing the same direction as GLENN’s truck such that their backs were turned towards the oncoming vehicles from behind.
Fourth, no convincing evidence was presented to rebut GLENN’s testimony that he had been momentarily blinded by the very bright and glaring lights of the oncoming vehicle at the opposite direction as his truck rounded the curve. He must have been still reeling from the blinding effect of the lights coming from the other vehicle when he plowed into the group of police trainees.
Indeed, as pointed out by appellant, instinct tells one ‘to stop or swerve to a safe place the moment he sees a cow, dog, or cat on the road, in order to avoid bumping or killing the same"; and more so if the one on the road is a person. It would therefore be inconceivable for GLENN, then a young college graduate with a pregnant wife and three very young children who were dependent on him for support, to have deliberately hit the group with his truck.
The conclusion of the trial court and the OSG the GLENN intentionally rammed and hit the jogging trainees was premised on the assumption that despite the first bumping thuds, he continued to accelerate his vehicle instead of applying his brakes, as shown by the absence of brake marks or skid marks along the traffic scene.
For its part, the defense attributed the continuous movement of GLENN’s vehicle to the confluence of the following factors:
1. The Isuzu Elf truck, a huge vehicle, was moving fast that even if the brakes were applied the truck would have still proceeded further on account of its momentum, albeit at a reduced speed, and would have stopped only after a certain distance.
2. The national highway, from Alae to Puerto, Cagayan de Oro City, was made of fine and smooth asphalt, free from obstructions on the road such as potholes or excavations. Moreover, the highway was going a little bit downward, more particularly from the first curve to the place of incident. Hence, it was easier and faster to traverse a distance "20 to 25 meters which was the approximate aggregate distance" from the first elements up to the 22nd or 23rd elements of the columns.
3. The weight of each of the trainees (the average of which could be 50 kilograms only) could hardly make an impact on the 3,900 kilograms truck, which was moving at a speed ranging from 60 to 70 kilometers per hour.
4. Considering that the width of the truck from the right to the left tires was wide and the under chassis was elevated, the truck could just pass over two persons lying flat on the ground without its rubber tires running over the bodies. Thus, GLENN would not notice any destabilization of the rubber tires.
5. Since the police trainees were jogging in the same direction as the truck was proceeding, the forward movements constituted a force parallel to the momentum of the forward-moving truck such that there was even much lesser force resisting the said ongoing momentum.
It is a well-entrenched rule that if the inculpatory facts are capable of two or more explanations – one consistent with the innocence or lesser degree of liability of the accused, and the other consistent with his guilt or graver responsibility – the Court should adopt the explanation which is more favorable to the accused.19
We are convinced that the incident, tragic though it was in light of the number of persons killed and seriously injured, was an accident and not an intentional felony. It is significant to note that there is no shred of evidence that GLENN had an axe to grind against the police trainees that would drive him into deliberately hitting them with intent to kill.
Although proof of motive is not indispensable to a conviction especially where the assailant is positively identified, such proof is, nonetheless, important in determining which of two conflicting theories of the incident is more likely to be true.20 Thus, in People v. Godinez,21 this Court said that the existence of a motive on the part of the accused becomes decisive in determining the probability or credibility of his version that the shooting was purely accidental.
Neither is there any showing of "a political angle of a leftist-sponsored massacre of police elements disguised in a vehicular accident."22 Even if there be such evidence, i.e., that the motive of the killing was in furtherance of a rebellion movement, GLENN cannot be convicted because if such were the case, the proper charge would be rebellion, and not murder.23
GLENN’s offense is in failing to apply the brakes, or to swerve his vehicle to the left or to a safe place the movement he heard and felt the first bumping thuds. Had he done so, many trainees would have been spared.
We have once said:
A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful, and prudent, if not from instinct, then through fear of incurring punishment. He is responsible for such results as anyone might foresee and for acts which no one would have performed except through culpable abandon. Otherwise his own person, rights and property, and those of his fellow-beings, would ever be exposed to all manner of danger and injury.24
The test for determining whether a person is negligent in doing an act whereby injury or damage results to the person or property of another is this: Could a prudent man, in the position of the person to whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to take precautions to guard against its mischievous results, and the failure to do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this prevision, is always necessary before negligence can be held to exist.25
GLENN showed an inexcusable lack of precaution. Article 365 of the Revised Penal Code states that reckless imprudence consists in voluntarily, but without malice, doing or failing to do an act from which material damage results by reason of inexcusable lack of precaution on the part of the person performing or failing to perform such act, taking into consideration (1) his employment or occupation; (2) his degree of intelligence; (4) his physical condition; and (3) other circumstances regarding persons, time and place.
GLENN, being then a young college graduate and an experienced driver, should have known to apply the brakes or swerve to a safe place immediately upon hearing the first bumping thuds to avoid further hitting the other trainees. By his own testimony, it was established that the road was slippery and slightly going downward; and, worse, the place of the incident was foggy and dark. He should have observed due care in accordance with the conduct of a reasonably prudent man, such as by slackening his speed, applying his brakes, or turning to the left side even if it would mean entering the opposite lane (there being no evidence that a vehicle was coming from the opposite direction). It is highly probable that he was driving at high speed at the time. And even if he was driving within the speed limits, this did not mean that he was exercising due care under the existing circumstances and conditions at the time.
Considering that the incident was not a product of a malicious intent but rather the result of a single act of reckless driving, GLENN should be held guilty of the complex crime of reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries.
Article 48 of the Revised Penal Code provides that when the single act constitutes two or more grave or less grave felonies, or when an offense is a necessary means for committing the other, the penalty for the most serious crime shall be imposed, the same to be applied in its maximum period. Since Article 48 speaks of felonies, it is applicable to crimes through negligence in view of the definition of felonies in Article 3 as "acts or omissions punishable by law" committed either by means of deceit {dolo) or fault (culpa).26 In Reodica v. Court of Appeals,27 we ruled that if a reckless, imprudent, or negligent act results in two or more grave or less grave felonies, a complex crime is committed. Thus, in Lapuz v. Court of Appeals,28 the accused was convicted, in conformity with Article 48 of the Revised Penal Code, of the complex crime of "homicide with serious physical injuries and damage to property through reckless imprudence," and was sentenced to a single penalty of imprisonment, instead of the two penalties imposed by the trial court. Also, in Soriao v. Court of Appeals,29 the accused was convicted of the complex crime of "multiple homicide with damage to property through reckless imprudence" for causing a motor boat to capsize, thereby drowning to death its twenty-eight passengers.
The slight physical injuries caused by GLENN to the ten other victims through reckless imprudence, would, had they been intentional, have constituted light felonies. Being light felonies, which are not covered by Article 48, they should be treated and punished as separate offenses. Separate informations should have, therefore, been filed.
It must be noted that only one information (for multiple murder, multiple frustrated murder and multiple attempted murder) was filed with the trial court. However, nothing appears in the record that GLENN objected to the multiplicity of the information in a motion to quash before his arraignment. Hence, he is deemed to have waived such defect.30 Under Section 3, Rule 120 of the Rules of Court, when two or more offenses are charged in a single complaint or information and the accused fails to object to it before trial, the court may convict the accused of as many offenses as are charged and proved, and impose on him the penalty for each of them.
Now, we come to the penalty. Under Article 365 of the Revised Penal Code, any person who, by reckless imprudence, shall commit any act which, had it been intentional, would constitute a grave felony shall suffer the penalty of arresto mayor in its maximum period to prision correccional in its medium period; and if it would have constituted a light felony, the penalty of arresto menor in its maximum period shall be imposed. The last paragraph thereof provides that the penalty next higher in degree shall be imposed upon the offender who fails to lend on the spot to the injured parties such help as may be in his hand to give. This failure to render assistance to the victim, therefore, constitutes a qualifying circumstance because the presence thereof raises the penalty by one degree.31 Moreover, the fifth paragraph thereof provides that in the imposition of the penalty, the court shall exercise its sound discretion without regard to the rules prescribed in Article 64. Elsewise stated, in felonies through imprudence or negligence, modifying circumstances need not be considered in the imposition of the penalty.32
In the case at bar, it has been alleged in the information and proved during the trial that GLENN "escaped from the scene of the incident, leaving behind the victims." It being crystal clear that GLENN failed to render aid to the victims, the penalty provided for under Article 365 shall be raised by one degree. Hence, for reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries, the penalty would be prision correccional in its maximum period to prision mayor in its medium period. Applying Article 48, the maximum of said penalty, which is prision mayor in its medium period, should be imposed. For the separate offenses of reckless imprudence resulting in slight physical injuries, GLENN may be sentenced to suffer, for each count, the penalty of arresto mayor in its minimum period.
Although it was established through the testimonies of prosecution witness Lemuel Pangca33 and of GLENN that the latter surrendered to Governor Emano of Misamis Oriental, such mitigating circumstance need not be considered pursuant to the aforestated fifth paragraph of Article 365.
Under the Indeterminate Sentence Law, GLENN may be sentenced to suffer an indeterminate penalty whose minimum is within the range of the penalty next lower in degree to that prescribed for the offense, and whose maximum is that which could properly be imposed taking into account the modifying circumstances. Hence, for the complex crime of reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries, qualified by his failure to render assistance to the victims, he may be sentenced to suffer an indeterminate penalty ranging from arresto mayor in its maximum period to prision correccional in its medium period, as minimum, to prision mayor in its medium period, as maximum. As to the crimes of reckless imprudence resulting in slight physical injuries, since the maximum term for each count is only two months the Indeterminate Sentence Law will not apply.
As far as the award of damages is concerned, we find a necessity to modify the same. Conformably with current jurisprudence,34 we reduce the trial court’s award of death indemnity from P75,000 to P50,000 for each group of heirs of the trainees killed. Likewise, for lack of factual basis, we delete the awards of P30,000 to each of those who suffered serious physical injuries and of P10,000 to each of those who suffered minor physical injuries.
WHEREFORE, the decision of the Regional Trial Court, Branch 38, Cagayan de Oro City, is hereby SET ASIDE, and another one is rendered holding herein accused-appellant GLENN DE LOS SANTOS guilty beyond reasonable doubt of (1) the complex crime of reckless imprudence resulting in multiple homicide with serious physical injuries and less serious physical injuries, and sentencing him to suffer an indeterminate penalty of four (4) years of prision correccional, as minimum, to ten (10) years of prision mayor, as maximum; and (2) ten (10) counts of reckless imprudence resulting in slight physical injuries and sentencing him, for each count, to the penalty of two (2) months of arresto mayor. Furthermore, the awards of death indemnity for each group of heirs of the trainees killed are reduced to P50,000; and the awards in favor of the other victims are deleted. Costs against accused-appellant.1âwphi1.nêt
SO ORDERED.
Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, De Leon, Jr., and Sandoval-Gutierrez, JJ., concur.
FIRST DIVISION
[G.R. No. 137909. December 11, 2003]
FIDELA DEL CASTILLO Vda. DE MISTICA, petitioner, vs. Spouses BERNARDINO NAGUIAT and MARIA PAULINA GERONA-NAGUIAT, respondents.
D E C I S I O N
PANGANIBAN, J.:
The failure to pay in full the purchase price stipulated in a deed of sale does not ipso facto grant the seller the right to rescind the agreement. Unless otherwise stipulated by the parties, rescission is allowed only when the breach of the contract is substantial and fundamental to the fulfillment of the obligation.
The Case
Before us is a Petition for Review[1][1] under Rule 45 of the Rules of Court, seeking to nullify the October 31, 1997 Decision[2][2] and the February 23, 1999 Resolution[3][3] of the Court of Appeals (CA) in CA-GR CV No. 51067. The assailed Decision disposed as follows:
“WHEREFORE, modified as indicated above, the decision of the Regional Trial Court is hereby AFFIRMED.”[4][4]
The assailed Resolution denied petitioner’s Motion for Reconsideration.
The Facts
The facts of the case are summarized by the CA as follows:
“Eulalio Mistica, predecessor-in-interest of herein [petitioner], is the owner of a parcel of land located at Malhacan, Meycauayan, Bulacan. A portion thereof was leased to [Respondent Bernardino Naguiat] sometime in 1970.
“On 5 April 1979, Eulalio Mistica entered into a contract to sell with [Respondent Bernardino Naguiat] over a portion of the aforementioned lot containing an area of 200 square meters. This agreement was reduced to writing in a document entitled ‘Kasulatan sa Pagbibilihan’ which reads as follows:
‘NAGSASALAYSAY:
‘Na ang NAGBIBILI ay nagmamay-aring tunay at naghahawak ng isang lagay na lupa na nasa Nayon ng Malhacan, Bayan ng Meycauayan, Lalawigan ng Bulacan, na ang kabuuan sukat at mga kahangga nito gaya ng sumusunod:
x x x x x x x x x
‘Na alang-alang sa halagang DALAWANG PUNG LIBONG PISO (P20,000.00) Kualtang Pilipino, ang NAGBIBILI ay nakipagkasundo ng kanyang ipagbibili ang isang bahagi o sukat na DALAWANG DAAN (200) METROS PARISUKAT, sa lupang nabanggit sa itaas, na ang mga kahangga nito ay gaya ng sumusunod:
x x x x x x x x x
‘Na magbibigay ng paunang bayad ang BUMIBILI SA NAGBIBILI na halagang DALAWANG LIBONG PISO (P2,000.00) Kualtang Pilipino, sa sandaling lagdaan ang kasulatang ito.
‘Na ang natitirang halagang LABING WALONG LIBONG PISO (P18,000.00) Kualtang Pilipino, ay babayaran ng BUM[I]BILI sa loob ng Sampung (10) taon, na magsisimula sa araw din ng lagdaan ang kasulatang ito.
‘Sakaling hindi makakabayad ang Bumibili sa loob ng panahon pinagkasunduan, an[g] BUMIBILI ay magbabayad ng pakinabang o interes ng 12% isang taon, sa taon nilakaran hanggang sa ito’y mabayaran tuluyan ng Bumibili:
‘Sa katunayan ng lahat ay nilagdaan ng Magkabilang Panig ang kasulatang ito, ngayon ika 5 ng Abril, 1979, sa Bayan ng Meycauayan. Lalawigan ng Bulacan, Pilipinas.
(signed) (signed)
BERNARDINO NAGUIAT EULALIO MISTICA
Bumibili Nagbibili’
“Pursuant to said agreement, [Respondent Bernardino Naguiat] gave a downpayment of P2,000.00. He made another partial payment of P1,000.00 on 7 February 1980. He failed to make any payments thereafter. Eulalio Mistica died sometime in October 1986.
“On 4 December 1991, [petitioner] filed a complaint for rescission alleging inter alia: that the failure and refusal of [respondents] to pay the balance of the purchase price constitutes a violation of the contract which entitles her to rescind the same; that [respondents] have been in possession of the subject portion and they should be ordered to vacate and surrender possession of the same to [petitioner] ; that the reasonable amount of rental for the subject land is P200.00 a month; that on account of the unjustified actuations of [respondents], [petitioner] has been constrained to litigate where she incurred expenses for attorney’s fees and litigation expenses in the sum of P20,000.00.
“In their answer and amended answer, [respondents] contended that the contract cannot be rescinded on the ground that it clearly stipulates that in case of failure to pay the balance as stipulated, a yearly interest of 12% is to be paid. [Respondent Bernardino Naguiat] likewise alleged that sometime in October 1986, during the wake of the late Eulalio Mistica, he offered to pay the remaining balance to [petitioner] but the latter refused and hence, there is no breach or violation committed by them and no damages could yet be incurred by the late Eulalio Mistica, his heirs or assigns pursuant to the said document; that he is presently the owner in fee simple of the subject lot having acquired the same by virtue of a Free Patent Title duly awarded to him by the Bureau of Lands; and that his title and ownership had already become indefeasible and incontrovertible. As counterclaim, [respondents] pray for moral damages in the amount of P50,000.00; exemplary damages in the amount of P30,000.00; attorney’s fees in the amount of P10,000.00 and other litigation expenses.
“On 8 July 1992, [respondents] also filed a motion to dismiss which was denied by the court on 29 July 1992. The motion for reconsideration was likewise denied per its Order of 17 March 1993.
“After the presentation of evidence, the court on 27 January 1995 rendered the now assailed judgment, the dispositive portion of which reads:
‘WHEREFORE, premises considered, judgment is hereby rendered:
‘1. Dismissing the complaint and ordering the [petitioner] to pay the [respondents] attorney’s fee in the amount of P10,000.00 and costs of the suit;
‘2. Ordering the [respondents]:
‘a. To pay [petitioner] and the heirs of Eulalio Mistica the balance of the purchase price in the amount of P17,000.00, with interest thereon at the rate of 12% per annum computed from April 5, 1989 until full payment is made, subject to the application of the consigned amount to such payment;
‘b. To return to [petitioner] and the heirs of Eulalio Mistica the extra area of 58 square meters from the land covered by OCT No. 4917 (M), the corresponding price therefor based on the prevailing market price thereof.’”[5][5] (Citations omitted)
CA’s Decision
Disallowing rescission, the CA held that respondents did not breach the Contract of Sale. It explained that the conclusion of the ten-year period was not a resolutory term, because the Contract had stipulated that payment -- with interest of 12 percent -- could still be made if respondents failed to pay within the period. According to the appellate court, petitioner did not disprove the allegation of respondents that they had tendered payment of the balance of the purchase price during her husband’s funeral, which was well within the ten-year period.
Moreover, rescission would be unjust to respondents, because they had already transferred the land title to their names. The proper recourse, the CA held, was to order them to pay the balance of the purchase price, with 12 percent interest.
As to the matter of the extra 58 square meters, the CA held that its reconveyance was no longer feasible, because it had been included in the title issued to them. The appellate court ruled that the only remedy available was to order them to pay petitioner the fair market value of the usurped portion.
Issues
“1. Whether or not the Honorable Court of Appeals erred in the application of Art. 1191 of the New Civil Code, as it ruled that there is no breach of obligation inspite of the lapse of the stipulated period and the failure of the private respondents to pay.
“2. Whether or not the Honorable Court of Appeals [e]rred in ruling that rescission of the contract is no longer feasible considering that a certificate of title had been issued in favor of the private respondents.
“3. Whether or not the Honorable Court of Appeals erred in ruling that since the 58 sq. m. portion in question is covered by a certificate of title in the names of private respondents reconveyance is no longer feasible and proper.”[8][8]
The Court’s Ruling
The Petition is without merit.
First Issue:
Rescission in Article 1191
Petitioner claims that she is entitled to rescind the Contract under Article 1191 of the Civil Code, because respondents committed a substantial breach when they did not pay the balance of the purchase price within the ten-year period. She further avers that the proviso on the payment of interest did not extend the period to pay. To interpret it in that way would make the obligation purely potestative and, thus, void under Article 1182 of the Civil Code.
We disagree. The transaction between Eulalio Mistica and respondents, as evidenced by the Kasulatan, was clearly a Contract of Sale. A deed of sale is considered absolute in nature when there is neither a stipulation in the deed that title to the property sold is reserved to the seller until the full payment of the price; nor a stipulation giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period.[9][9]
In a contract of sale, the remedy of an unpaid seller is either specific performance or rescission.[10][10] Under Article 1191 of the Civil Code, the right to rescind an obligation is predicated on the violation of the reciprocity between parties, brought about by a breach of faith by one of them.[11][11] Rescission, however, is allowed only where the breach is substantial and fundamental to the fulfillment of the obligation.[12][12]
In the present case, the failure of respondents to pay the balance of the purchase price within ten years from the execution of the Deed did not amount to a substantial breach. In the Kasulatan, it was stipulated that payment could be made even after ten years from the execution of the Contract, provided the vendee paid 12 percent interest. The stipulations of the contract constitute the law between the parties; thus, courts have no alternative but to enforce them as agreed upon and written.[13][13]
Moreover, it is undisputed that during the ten-year period, petitioner and her deceased husband never made any demand for the balance of the purchase price. Petitioner even refused the payment tendered by respondents during her husband’s funeral, thus showing that she was not exactly blameless for the lapse of the ten-year period. Had she accepted the tender, payment would have been made well within the agreed period.
If petitioner would like to impress upon this Court that the parties intended otherwise, she has to show competent proof to support her contention. Instead, she argues that the period cannot be extended beyond ten years, because to do so would convert the buyer’s obligation to a purely potestative obligation that would annul the contract under Article 1182 of the Civil Code.
This contention is likewise untenable. The Code prohibits purely potestative, suspensive, conditional obligations that depend on the whims of the debtor, because such obligations are usually not meant to be fulfilled.[14][14] Indeed, to allow the fulfillment of conditions to depend exclusively on the debtor’s will would be to sanction illusory obligations.[15][15] The Kasulatan does not allow such thing. First, nowhere is it stated in the Deed that payment of the purchase price is dependent upon whether respondents want to pay it or not. Second, the fact that they already made partial payment thereof only shows that the parties intended to be bound by the Kasulatan.
Both the trial and the appellate courts arrived at this finding. Well-settled is the rule that findings of fact by the CA are generally binding upon this Court and will not be disturbed on appeal, especially when they are the same as those of the trial court.[16][16] Petitioner has not given us sufficient reasons to depart from this rule.
Second Issue:
Rescission Unrelated to Registration
The CA further ruled that rescission in this case would be unjust to respondents, because a certificate of title had already been issued in their names. Petitioner nonetheless argues that the Court is still empowered to order rescission.
We clarify. The issuance of a certificate of title in favor of respondents does not determine whether petitioner is entitled to rescission. It is a fundamental principle in land registration that such title serves merely as an evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.[17][17]
While a review of the decree of registration is no longer possible after the expiration of the one-year period from entry, an equitable remedy is still available to those wrongfully deprived of their property.[18][18] A certificate of title cannot be subject to collateral attack and can only be altered, modified or canceled in direct proceedings in accordance with law.[19][19] Hence, the CA correctly held that the propriety of the issuance of title in the name of respondents was an issue that was not determinable in these proceedings.
Third Issue:
Reconveyance of the Portion Importunately Included
Petitioner argues that it would be reasonable for respondents to pay her the value of the lot, because the CA erred in ruling that the reconveyance of the extra 58-square meter lot, which had been included in the certificate of title issued to them, was no longer feasible.
In principle, we agree with petitioner. Registration has never been a mode of acquiring ownership over immovable property, because it does not create or vest title, but merely confirms one already created or vested.[20][20] Registration does not give holders any better title than what they actually have.[21][21] Land erroneously included in the certificate of title of another must be reconveyed in favor of its true and actual owner.[22][22]
Section 48 of Presidential Decree 1529, however, provides that the certificate of title shall not be subject to collateral attack, alteration, modification, or cancellation except in a direct proceeding.[23][23] The cancellation or removal of the extra portion from the title of respondents is not permissible in an action for rescission of the contract of sale between them and petitioner’s late husband, because such action is tantamount to allowing a collateral attack on the title.
It appears that an action for cancellation/annulment of patent and title and for reversion was already filed by the State in favor of petitioner and the heirs of her husband.[24][24] Hence, there is no need in this case to pass upon the right of respondents to the registration of the subject land under their names. For the same reason, there is no necessity to order them to pay petitioner the fair market value of the extra 58-square meter lot importunately included in the title.
WHEREFORE, the assailed Decision and Resolution are AFFIRMED with the MODIFICATION that the payment for the extra 58-square meter lot included in respondents’ title is DELETED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
[1][1] Rollo, pp. 22-33.
[2][2] Id., pp. 49-56. Fourth Division. Penned by Justice Antonio M. Martinez (Division chairman), with the concurrence of Justices Corona Ibay-Somera and Oswaldo D. Agcaoili (members).
[3][3] Id., p. 65; penned by Justice Corona Ibay-Somera and concurred in by Justices Oswaldo D. Agcaoili and Mariano M. Umali.
[4][4] CA Decision, p. 7; rollo, p. 55.
[5][5] Id., pp. 1-4 & 49-52.
[6][6] The case was deemed submitted for decision on December 13, 2001, upon this Court’s receipt of respondents’ Memorandum signed by Atty. Ernesto S. Salunat. It was noted in the Court’s Resolution dated February 6, 2002. Petitioner’s Memorandum, signed by Atty. Manuel P. Punzalan, was received by this Court on October 26, 2000.
[7][7] Rollo, pp. 92-105.
[8][8] Petitioner’s Memorandum, p. 5; rollo, p. 96.
[9][9] People’s Industrial and Commercial Corp. v. Court of Appeals, 346 Phil. 189, 203, October 24, 1997; Sps. Babasa v. Court of Appeals, 352 Phil. 1142, May 21, 1998.
[10][10] Jacinto v. Kaparaz, 209 SCRA 246, 257, May 22, 1992; Heirs of Escanlar v. Court of Appeals, 346 Phil. 158, 172, October 23, 1997.
[11][11] Uy v. Court of Appeals, 372 Phil. 743, September 9, 1999.
[12][12] Power Commercial and Industrial Corp. v. Court of Appeals, 274 SCRA 597, 608, June 20, 1997; Development Bank of the Philippines v. Court of Appeals, 344 SCRA 492, 509, October 30, 2000.
[13][13] Valarao v. Court of Appeals, 363 Phil. 495, 506, March 3, 1999.
[14][14] Vitug, Compendium of Civil Law & Jurisprudence (1993 rev. ed.), p. 488; Perez v. Court of Appeals, 380 Phil. 592, 600, January 28, 2000.
[15][15] Tolentino, Commentaries and Jurisprudence on the Civil Code, Vol. IV (1991 ed.), p. 152.
[16][16] Lubos v. Galupo, 373 SCRA 618, January 16, 2002; Manufacturers Building, Inc. v. CA, 354 SCRA 521, March 16, 2001; Xentrex Automotive, Inc. v. CA, 353 Phil. 258, June 18, 1998.
[17][17] Vda. de Retuerto v. Barz, 372 SCRA 712, 719, December 19, 2001; Heirs of Brusas v. Court of Appeals, 372 Phil. 47, August 26, 1999; Liao v. Court of Appeals, 380 Phil. 400, January 27, 2000.
[18][18] Villanueva-Mijares v. Court of Appeals, 386 Phil. 555, April 12, 2000; Heirs of Ramon Durano Sr. v. Uy, 344 SCRA 238, 263, October 24, 2000.
[19][19] Seville v. National Development Company, 351 SCRA 112, 125, February 2, 2001; Zaragoza v. Court of Appeals, 341 SCRA 309, 317, September 29, 2000; Tan v. Philippine Banking Corporation, 355 SCRA 292, 299, March 26, 2001; Vda. de Retuerto v. Barz, supra, p. 722; Mallilin Jr. v. Castillo, 389 Phil. 153, June 16, 2000.
[20][20] Development Bank of the Philippines v. Court of Appeals, 387 Phil. 283, April 28, 2000; Republic v. Court of Appeals, 335 SCRA 693, 700, July 14, 2000; Republic of the Phils. v. Court of Appeals, 361 Phil. 319, January 21, 1999; Garcia v. Court of Appeals, 371 Phil. 107, August 10, 1999.
[21][21] Heirs of Ingjug-Tiro v. Sps. Casals, 415 Phil. 665, August 20, 2001.
[22][22] Development Bank of the Philippines v. Court of Appeals, supra, p. 285; Republic v. CA, supra, p. 384; De Ocampo v. Arlos, 343 SCRA 716, 727, October 19, 2000.
[23][23] Mallilin Jr. v. Castillo, supra.
[24][24] Docketed as Civil Case No. 182-M-95 and filed with the RTC of Malolos, Bulacan (Branch 12); rollo, pp. 106-112.
SPS. HENRY CO AND ELIZABETH CO AND MELODY CO, Petitioners, vs. COURT OF APPEALS AND MRS. ADORACION CUSTODIO, represented by her Attorney-in-fact, TRINIDAD KALAGAYAN, Respondents.
D E C I S I O N
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals[1 in CA-G.R. CV No. 32972 entitled MRS. ADORACION CUSTODIO, represented by her Attorney-in-fact, TRINIDAD KALAGAYAN vs. SPS. HENRY CO AND ELIZABETH CO AND MELODY CO.
The following facts as found by the lower court and adopted by the Court of Appeals are undisputed:
xxx sometime on October 9, 1984, plaintiff entered into a verbal contract with defendant for her purchase of the latters house and lot located at 316 Beata St., New Alabang Village, Muntinlupa, Metro Manila, for and in consideration of the sum of $100,000.00. One week thereafter, and shortly before she left for the United States, plaintiff paid to the defendants the amounts of $1,000.00 and P40,000.00 as earnest money, in order that the same may be reserved for her purchase, said earnest money to be deducted from the total purchase price. The purchase price of $100,000.00 is payable in two payments $40,000.00 on December 4, 1984 and the balance of $60,000.00 on January 5, 1985. On January 25, 1985, although the period of payment had already expired, plaintiff paid to the defendant Melody Co in the United States, the sum of $30,000.00, as partial payment of the purchase price. Defendants counsel, Atty. Leopoldo Cotaco, wrote a letter to the plaintiff dated March 15, 1985, demanding that she pay the balance of $70,000.00 and not receiving any response thereto, said lawyer wrote another letter to plaintiff dated August 8, 1986, informing her that she has lost her option to purchase the property subject of this case and offered to sell her another property.
Under date of September 5 (1986), Atty. Estrella O. Laysa, counsel for plaintiff, wrote a letter to Atty. Leopoldo Cotaco informing him that plaintiff is now ready to pay the remaining balance to complete the sum of $100,000.00, the agreed amount as selling price and on October 24, 1986, plaintiff filed the instant complaint.[i][2
The Regional Trial Court (RTC) ruled in favor of private respondent Adoracion Custodio (CUSTODIO) and ordered the petitioner spouses Henry and Elizabeth Co (COS) to refund the amount of $30,000.00 in CUSTODIOs favor. The dispositive portion of the RTCs decision reads:
WHEREFORE, the Court hereby orders:
1. that the earnest money of $1,000.00 and P40,000.00 is hereby forfeited in favor of the defendants, and
2. the defendants are ordered to remit to plaintiff the peso equivalent of THIRTY THOUSAND ($30,000.00) U.S. DOLLARS, at the prevailing rate of exchange at the time of payment.
Costs against plaintiff.
SO ORDERED.[ii][3
Not satisfied with the decision, the COS appealed to the Court of Appeals which affirmed the decision of the RTC. Hence, this appeal where the COS assign as sole error the following:
PETITIONER RESPECTFULLY SUBMITS THAT RESPONDENT COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THE SUPREME COURT.[iii][4
The COS argue that the Court of Appeals erred in ruling that CUSTODIO could still exercise her option to pay the balance of the purchase price of the property. The COS claim that CUSTODIO was in default since she failed to pay after a demand was made by the petitioners in their March 15, 1985 letter[5. The COS claim that they never granted CUSTODIO an extension of time to exercise the option contrary to the finding of the Court of Appeals that a thirty (30) day period of time was granted to her in their August 8, 1986 letter[iv][6. Said period refers to another option which the COS gave CUSTODIO to buy another piece of property and not the Beata property as they could no longer hold the Beata property for CUSTODIO. In fact, said letter specifically states that CUSTODIO lost her option to purchase the subject property; that the COS were willing to apply the payments already made to the payment of the second property; and that if CUSTODIO failed to purchase the second property within thirty (30) days, she would forfeit her previous payments. Since CUSTODIO manifested her readiness to exercise her option to pay the balance of the purchase price of the Beata property and not the second property, her manifestation was no longer of any legal effect as this option was no longer available to her. This being the case, the Court of Appeals should have ruled that the COS properly rescinded their contract with CUSTODIO over the Beata property pursuant to Article 1191[v][7 of the Civil Code and should have further ordered her to pay them damages consequent to the rescission. Moreover, even assuming that they waived the deadline by accepting the payment of $30,000.00 on January 26, 1986, CUSTODIO still failed to pay the remaining balance of $70,000.00. Her offer to pay the remaining balance came too late as the option given to her had already been lost. In addition, the Court of Appeals also erred in ordering the COS to return the $30,000.00 dollars since the August 8, 1986 letter warned CUSTODIO that if the she did not exercise her option within thirty days, she would lose her option and other rights and any payments made shall be forfeited. Finally, the COS claim that the Court of Appeals erred in not granting them attorneys fees when the law allows recovery therefor considering that by the defendants act or omission, the plaintiff is compelled to litigate with third persons or to incur expenses to protect his rights.[8
The core issue is whether or not the Court of Appeals erred in ordering the COS to return the $30,000.00 paid by CUSTODIO pursuant to the option granted to her over the Beata property?
We rule in the negative.
The COS main argument is that CUSTODIO lost her option over the Beata property and her failure to exercise said option resulted in the forfeiture of any amounts paid by her pursuant to the August letter.
An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price. It is a separate and distinct contract from that which the parties may enter into upon the consummation of the option. It must be supported by consideration.[9 An option contract conforms with the second paragraph of Article 1479 of the Civil Code[vi][10 which reads:
Article 1479. xxx
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price.
However, the March 15, 1985 letter[11 sent by the COS through their lawyer to the CUSTODIO reveals that the parties entered into a perfected contract of sale and not an option contract.
A contract of sale is a consensual contract and is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price. From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts.[vii][12 The elements of a valid contract of sale under Article 1458 of the Civil Code are (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.[13 As evidenced by the March 15, 1985 letter, all three elements of a contract of sale are present in the transaction between the petitioners and respondent. CUSTODIOs offer to purchase the Beata property, subject of the sale at a price of $100,000.00 was accepted by the COS. Even the manner of payment of the price was set forth in the letter. Earnest money in the amounts of US$1,000.00 and P40,000.00 was already received by the COS. Under Article 1482[14 of the Civil Code, earnest money given in a sale transaction is considered part of the purchase price and proof of the perfection of the sale.[viii][15
Despite the fact that CUSTODIOs failure to pay the amounts of US$ 40,000.00 and US$ 60,000.00 on or before December 4, 1984 and January 5, 1985 respectively was a breach of her obligation under Article 1191[ix][16 of the Civil Code, the COS did not sue for either specific performance or rescission of the contract. The COS were of the mistaken belief that CUSTODIO had lost her option over the Beata property when she failed to pay the remaining balance of $70,000.00 pursuant to their August 8, 1986 letter. In the absence of an express stipulation authorizing the sellers to extrajudicially rescind the contract of sale, the COS cannot unilaterally and extrajudicially rescind the contract of sale.[17 Accordingly, CUSTODIO acted well within her rights when she attempted to pay the remaining balance of $70,000.00 to complete the sum owed of $100,000.00 as the contract was still subsisting at that time. When the COS refused to accept said payment and to deliver the Beata property, CUSTODIO immediately sued for the rescission of the contract of sale and prayed for the return of the $30,000.00 she had initially paid.
Under Article 1385[18 of the Civil Code, rescission creates the obligation to return the things which were the object of the contract but such rescission can only be carried out when the one who demands rescission can return whatever he may be obliged to restore. This principle has been applied to rescission of reciprocal obligations under Article 1191 of the Civil Code.[x][19 The Court of Appeals therefore did not err in ordering the COS to return the amount of $30,000.00 to CUSTODIO after ordering the rescission of the contract of sale over the Beata property. We quote with approval the Court of Appeals decision to wit:
Since it has been shown that the appellee who was not in default, was willing to perform part of the contract while the appellants were not, rescission of the contract is in order. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him, (Article 1191, same Code). Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest x x x x (Article 1385, same Code).
In the case at bar, the property involved has not been delivered to the appellee. She has therefore nothing to return to the appellants. The price received by the appellants has to be returned to the appellee as aptly ruled by the lower court, for such is a consequence of rescission, which is to restore the parties in their former situations.
No error was committed by the lower court when it did not award attorneys fees to the appellants for as has been shown, the appellees complaint is not unfounded.[xi][20
We cannot uphold the forfeiture clause contained in the petitioners August 8, 1986 letter. It appears that such condition was unilaterally imposed by the COS and was not agreed to by CUSTODIO. It cannot therefore be considered as part of the contract of sale as it lacks the consent of CUSTODIO.[21
Finally, the Court of Appeals did not err in not awarding the COS attorneys fees. Although attorneys fees may 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[xii][22, we find that CUSTODIOs act clearly was not unjustified.
WHEREFORE, the instant petition is hereby DENIED, and the appealed decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.
[i][1 Ninth Division composed of the ponente, J. Gloria C. Paras (Chairman); and the members, J. Cezar D. Francisco and J. Buenaventura J. Guerrero, concurring.
[iv][5 March 15, 1985
Ms. Adoracion Custodio
3919 Crofton Way
So. San Francisco,
California 94080
Dear Ms. Custodio:
Subject: House and Lot at 316 Beata St.,
New Alabang Village, Philippines
This has reference to your offer to buy subject property for US$100,000.00 last 9 October 1984 and was accepted by its owners, Mr. And Mrs. Henry L. Co, with the amount of US$1,000.00 and P40,000.00 as earnest monies to be deducted at the close of the escrow.
Per your agreement, you should pay purchase price as follows:
US$ 40,000.00 on or before December 4, 1984
US$ 60,000.00 on or before January 5, 1985
The only payment received was on the latter part of January 26, 1985 for US$ 30,000.00.
We wish to inform your goodself that your delay and non-payment of the balances have caused some financial expenses, opportunities lost and exchange losses.
We would appreciate your kind attention and early settlement of this matter.
Very truly yours,
LEOPOLDO D. COTACO
[iv][6 8 August 1986
Mrs. Adoracion R. Custodio
3919 Crofton Way
So. San Francisco
California 94080
Re: House and Lot at Alabang
Dear Mrs. Custodio:
We wish to advise in behalf of our clients, Mr. And Mrs. HENRY L. CO, that although you have lost your option to purchase their property at Beata St., Alabang, due to your failure to comply with your commitment. Another property, also at Alabang was recently shown to your Attorney-in-fact, Mrs. Trinidad Kalagayan, for her consideration.
As the other property cannot be reserved for you for an indefinite period, our clients are giving you thirty (30) days from receipt hereof whether or not to purchase it.
Should we not hear from you after that period, said property shall be offered for sale to other buyers.
In which case, your option and other rights including any payment made shall be forfeited.
Very truly yours,
APOLINARIO DALMACION &
ASSOCIATES
By:
LEOPOLDO D. COTACO
Mrs. Adoracion R. Custodio
3919 Crofton Way
So. San Francisco
California 94080
Re: House and Lot at Alabang
Dear Mrs. Custodio:
We wish to advise in behalf of our clients, Mr. And Mrs. HENRY L. CO, that although you have lost your option to purchase their property at Beata St., Alabang, due to your failure to comply with your commitment. Another property, also at Alabang was recently shown to your Attorney-in-fact, Mrs. Trinidad Kalagayan, for her consideration.
As the other property cannot be reserved for you for an indefinite period, our clients are giving you thirty (30) days from receipt hereof whether or not to purchase it.
Should we not hear from you after that period, said property shall be offered for sale to other buyers.
In which case, your option and other rights including any payment made shall be forfeited.
Very truly yours,
APOLINARIO DALMACION &
ASSOCIATES
By:
LEOPOLDO D. COTACO
[v][7 Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between he fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing f a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. (1124)
The injured party may choose between he fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing f a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. (1124)
[vi][9 Equatorial Realty Development, Inc. vs. Mayfair Theater, Inc., 264 SCRA 483 at p. 505 [1996].
[viii][14 Art. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract. (1454a)
[x][18 Art. 1385. Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest; consequently, it can be carried out only when he who demands rescission can return whatever he may be obliged to restore. xxx
[xii][21 Article 1318, Civil Code- There is no contract unless the following requisites concur:
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
In relation to Article 1319, Civil Code Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer. xxx21
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
In relation to Article 1319, Civil Code Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer. xxx21
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