THIRD DIVISION
[G.R. No. 230761. October 13, 2021.]
SPOUSES NAPOLEON AND BABYLENE ESCUYOS, petitioners, vs.FELICIDAD LACOSTALES, RYAN LACOSTALES, ROSE LACOSTALES, AND RUBY EVANGELISTA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedOctober 13, 2021, which reads as follows:
"G.R. No. 230761 — (SPOUSES NAPOLEON AND BABYLENE ESCUYOS, petitioners v. FELICIDAD LACOSTALES, RYAN LACOSTALES, ROSE LACOSTALES, AND RUBY EVANGELISTA, respondents). — The general prayer in the complaint for "other reliefs just and equitable in the premises" justifies the grant of relief warranted by the allegations and the proof.
This resolves a Petition for Review, 1 assailing the Decision 2 and Resolution 3 of the Court of Appeals, which affirmed the Decision 4 of the Regional Trial Court. The Regional Trial Court ordered Spouses Napoleon and Babylene Escuyos to pay the balance of the purchase price of the land they bought from Felicidad, Ryan, and Rose Lacostales, and Ruby Evangelista with 6% legal interest plus damages.
On May 15, 2009, Felicidad, Ryan, Rose, and Ruby sold their house and lot in Kalawaan, Binangonan, Rizal to the Escuyos Spouses for P700,000.00, as evidenced by the Kasulatan ng Bilihang Kondisyonal Sa Isang Lagay Na Lupa at Isang Bahay Tirahan. The Escuyos Spouses paid the down payment of P300,000.00 upon the execution of the Kasulatan, leaving a balance of P400,000.00. 5
The Kasulatan contained the following provision:
1) Na ang balanseng APATNARAANG LIBONG (P400,000.00) PISO, Salaping Pilipino ay babayaran ng BUMIBILI sa NAGBIBILI sa paraang HULUGAN hanggang mabayaran ng kumpleto ang naulit na balance[.] 6
Felicidad, Ryan, Rose, and Ruby alleged that they also executed a Pagpapatunay on the same day, where they promised to vacate the property in two months. The Escuyos Spouses, on the other hand, promised to pay the balance in full by August 2009. 7 CAIHTE
In July 2009, the Escuyos Spouses paid P15,000.00, 8 leaving a balance of P385,000.00. Felicidad, Ryan, Rose, and Ruby, in turn, vacated the property. 9
On December 21, 2009, Felicidad, Ryan, Rose, and Ruby filed a Complaint for Reformation of Contract and Damages against the Escuyos Spouses. They alleged that when the Escuyos Spouses paid P15,000.00, the latter reiterated their promise to pay the balance in August 2009. However, they failed to pay when August came. 10 As such, Felicidad, Ryan, Rose, and Ruby sought to fix a period in the deed of sale and recover the balance of the purchase price of the house and lot, damages, and attorney's fees. 11
In their Answer, the Escuyos Spouses claimed that Felicidad, Ryan, Rose, and Ruby had no cause of action against them per the deed of sale. They added that the parties had an oral agreement to pay the balance in monthly installments of P4,000.00. 12
During the trial, Felicidad, Ryan, Rose, and Ruby presented Felicidad as their sole witness. Meanwhile, the Escuyos Spouses failed to present their evidence despite notice. 13
The Regional Trial Court ruled in favor of Felicidad, Ryan, Rose, and Ruby. It held that under paragraph 1 of the Kasunduan, the full payment of the balance depended on the will of the Escuyos Spouses. Pursuant to Article 1197 of the Civil Code, this entitled Felicidad, Ryan, Rose, and Ruby to seek the fixing of a period. It further held that the "deed of sale's true intent is not expressed because of [Felicidad, Ryan, Rose, and Ruby's] mistake and [the Escuyos spouses] showed inequitable conduct by taking advantage of this." 14
The trial court also found that based on the evidence of Felicidad, Ryan, Rose, and Ruby, the parties indeed intended for the payment of the balance by August 2009. It then ordered the Escuyos Spouses to immediately pay the balance with 6% interest, aside from the payment of moral and exemplary damages, plus attorney's fees.
The dispositive portion of the Decision reads:
ACCORDINGLY, judgment is rendered in plaintiff's favor and we FIX the period for the payment of the balance of P385,000.00 in the parties' deed of sale to August 2009. Considering that this period has long expired and the debt is now due and demandable, under the complaint's "just and relief" clause, we ORDER defendants to immediately pay plaintiffs the balance of P385,000.00 with 6% interest until fully paid. We further ORDER defendants to pay plaintiffs the sums of P10,000.00 as moral damages, P10,000.00 as exemplary damages and P10,000.00 as attorney's fees and costs. 15
The Escuyos Spouses moved for reconsideration. However, the trial court denied the same. 16
The Escuyos Spouses appealed to the Court of Appeals. They contended that the trial court erred (1) in ordering them to pay the balance of the purchase price when it was not asked in the Complaint and (2) in giving full credence to the version of the story of Felicidad, Ryan, Rose, and Ruby. 17 HEITAD
The Court of Appeals affirmed the Decision of the Regional Trial Court. It held that from the Kasulatan, a period to pay the balance of the contract price was intended by the parties although incomplete. Hence, the court may fix the period for payment pursuant to Article 1197 of the New Civil Code. 18
Moreover, the Court of Appeals held that the parties, through their Kasulatan, intended that the balance of P400,000.00 be paid in equal monthly installments. Considering that the first payment in July 2009 was P15,000.00, the installments should have been paid monthly from July 2009 to September 2011. Since September 2011 had long passed, the Regional Trial Court correctly declared the amount due and demandable. 19
The Court of Appeals also affirmed the imposition of legal interest. It reiterated that "when the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest shall be 6% per annum from such finality until its satisfaction." 20
The Escuyos Spouses filed a motion for reconsideration. However, it was denied by Court of Appeals. 21
Hence, this Petition. 22
Respondents Felicidad, Ryan, and Rose Lacostales and Ruby Evangelista filed a Comment, 23 to which petitioners Spouses Napoleon and Babylene Escuyos filed a Reply. 24
We resolve the issues of whether or not the Court of Appeals erred (1) in giving full credence to the lone testimony of Felicidad despite the alleged inconsistencies in her testimony and (2) in affirming the award of 6% legal interest even when it was not asked in the Complaint.
As to the credibility of Felicidad, petitioners point out the alleged inconsistency in her testimony. They allege that "[on pages] 2 to 3 of her Judicial Affidavit, [Felicidad] claimed that the petitioners promised to pay the balance in full in August 2009. Yet, [on] page 3 of her Judicial Affidavit, [she] claimed that it is her understanding that petitioners will pay the balance in a year." They also contend that it was illogical for respondents to claim that there was an agreement on the date of full payment while they failed to indicate this in their Kasunduan. As such, the Court of Appeals allegedly erred in sustaining the Regional Trial Court's ruling. 25
Petitioners also assail the award of 6% legal interest on the ground that it was not prayed for in the Complaint. They argue that the Complaint merely sought for the reformation of the contract to set the date for the payment of the balance of P385,000.00. In any case, they add that it was respondents' fault in failing to indicate the time of payment of the balance in the Kasunduan. Accordingly, they should bear the consequences of their error. 26
On the other hand, respondents contend that the findings of the trial court deserve great respect as it has observed the demeanor of the witness. At any rate, Felicidad's testimony was unrebutted and supported by the documentary evidence on record. Besides, they allege the Court of Appeals relied not only on Felicidad's testimony, but also on the parties' contract, their subsequent actions after its execution, and petitioner's admissions, in arriving at its decision. 27 ETHIDa
They also contend that the Court of Appeals correctly affirmed the trial court's award of legal interest. Since petitioners failed to settle the balance on the date fixed by the Court of Appeals, then petitioners incurred in delay. For this, respondents invoke Article 2209 of the Civil Code and the ruling in Eastern Shipping Lines v. Court of Appeals, making petitioners liable to pay 6% legal interest. Respondents add that the general prayer "for other reliefs just and equitable" allows for the award of legal interest. 28
In their Reply, 29 petitioners reiterate that they could not be considered in delay. They allege that the contract did not stipulate the time when the balance of the contract price should be paid. They add that Felicidad was not telling the truth in her testimony. 30
The Petition is denied.
I
Petitioners contend that the trial and appellate courts erred in relying on the sole testimony of Felicidad and ruling that the balance of P385,000 became due and demandable in August 2009. According to petitioners, Felicidad' testimony was riddled with inconsistencies.
The issue on the credibility of Felicidad's testimony is factual, which is not proper in a Rule 45 petition before this Court. As a rule, only questions of law may be raised in a petition for review 31 and factual findings of the Court of Appeals are conclusive on this Court. 32 Petitioners have not sufficiently shown that this case falls under any of the exceptions. 33
In any case, contrary to petitioners' contention, the Court of Appeals disagreed with the period fixed by the trial court. It is clear from the Decision that the Court of Appeals relied not only on Felicidad's testimony, but on the terms of the Kasulatan and petitioners' admission that they paid respondents P15,000.00 in July 2009. The Court of Appeals held that based on the records, the parties have probably contemplated the payment of equal monthly amortizations of P15,000.00 until the balance of P400,000.00 is fully paid, i.e., from July 2009 to September 2011.
Still, whether the balance became due in August 2009, as fixed by the trial court, or in September 2011, as determined by the Court of Appeals, it is inescapable that both periods have long passed, and the obligation remained unpaid. Hence, the Court of Appeals affirmed the trial court's order directing the immediate payment of the balance of P385,000.00.
II
We now determine the propriety of the award of 6% legal interest.
Petitioners contend that respondents had merely sought to reform the contract to fix the period for payment of the balance. They claim this is apparent in the prayer of the Complaint, which reads:
Wherefore, plaintiffs respectfully pray that judgment be rendered ordering:
1. The reformation of the Contract to reflect the true intention of the parties to set a specific date for the payment of the balance of Three Hundred Eighty Five Thousand Pesos (Php385,000.00);
2. Defendants to pay the amount of Ten Thousand Pesos (P10,000.00) as moral damages; cSEDTC
3. Defendants to pay the amount of Ten Thousand Pesos (P10,000.00) as exemplary damages. 34
As such, petitioners aver that the Regional Trial Court erred when it went beyond fixing the date of payment and ordered them to immediately pay the balance of P385,000.00 with interest of 6%. 35
Petitioners' contention is untenable.
The prayer in the complaint for other reliefs just and equitable in the premises is, according to jurisprudence, 36 broad enough to justify the grant of relief warranted by the allegations and the proof. This is even if no such relief is prayed for.
In this case, it is evident from the allegations in the complaint that respondents also demanded for the payment of the balance of the purchase price, which they claimed was overdue. It is respondents' main contention that petitioners had promised to pay in full the remaining balance by August 2009. 37 Unfortunately, this was not reflected in the Kasunduan by mistake. Thus, respondents did not only ask the trial court to fix the period for payment, but also sued for the unpaid balance, damages, and attorney's fees. 38
The fixing of period and collection of the unpaid balance may be pursued and determined in one action.
In Borromeo v. Court of Appeal: 39
Nor could there be any legal objection to the complaint by the creditor Borromeo of January 7, 1953 embodying not merely the fixing of the period within which the debtor Villamor was to pay but likewise the collection of the amount that until then was not paid. An action combining both features did receive the imprimatur of the approval of this Court. As was clearly set forth in Tiglao v. The Manila Railroad Company: "There is something to defendant's contention that in previous cases this Court has held that the duration of the term should be fixed in a separate action for that express purpose. But we think the lower court has given good reasons for not adhering to technicalities in its desire to do substantial justice." The justification became even more apparent in the latter portion of the opinion of Justice Alex Reyes for this Court: "We may add that defendant does not claim that if a separate action were instituted to fix the duration of the term of its obligation, it could present better proofs than those already adduced in the present case. Such separate action would, therefore, be a mere formality and would serve no purpose other than to delay." There is no legal obstacle then to the action for collection filed by the creditor. Moreover, the judgment of the lower court, reversed by the respondent Court of Appeals, ordering the payment of the amount due is in accordance with law. 40 (Emphases supplied, citations omitted)
The Regional Trial Court determined the due date contemplated by the parties to be August 2009. It then awarded 6% legal interest based on its findings that the balance of P385,000.00 had long been due and petitioners incurred in delay. On the other hand, the Court of Appeals disagreed with the Regional Trial Court and held that the payment of the balance became due and demandable only in September 2011. Still, it affirmed the award of 6% legal interest on the ground that September 2011 had long passed and the obligation was long overdue.
Article 1170 of the Civil Code expressly provides that "those who in the performance of their obligations are guilty of fraud, negligence, or delay, . . . are liable for damages."
Article 2209 of the New Civil Code further provides:
Article 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum. (Emphases supplied)
Under the foregoing provision, interest is granted as indemnity for damages arising from delay on the part of the debtor in an obligation consisting in the payment of a sum of money. Interest under Article 2209 is in the nature of a compensatory interest. 41 The payment of the interest is a necessary consequence of the obligor's failure to discharge its obligation with due diligence. 42 The provision is not confined to a loan or forbearance of money, but includes all other obligations consisting of the payment of a sum of money, as explained in Castelo v. Court of Appeals: 43
Article 2209 governs transactions involving the payment of indemnity in the concept of damages arising from delay in the discharge of obligations consisting of the payment of a sum of money. The "obligation consisting in the payment of a sum of money" referred to in Article 2209 is not confined to a loan or forbearance of money. The Court has, for instance, consistently applied Article 2209 in the determination of the interest properly payable where there was default in the payment of the price or consideration under a contract of sale as in the case at bar. Article 2209 has also been applied by this Court in cases involving an action for damages for injury to persons and loss or property; to actions for damages arising from unpaid insurance claims; and an action involving the appropriate rate of interest on just compensation that is payable for expropriated lands. 44 (Emphases supplied, citations omitted) SDAaTC
Accordingly, there must be a showing that petitioners incurred in delay. 45 Under Article 1169 46 of the New Civil Code, one "incurs in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation." Furthermore, under Article 1193, an obligation is demandable only upon due date. 47
In other words, a person defaults or is in delay when (1) the obligation becomes due and demandable and (2) a demand for payment has been made.
Here, upon the filing of the complaint in December 2009, the remaining balance was not yet due and demandable. The period for payment, as fixed by the Court of Appeals, was only in September 2011. Accordingly, the interest does not run from the filing of the complaint as there was yet no delay. 48
There can only be delay after the promulgation of the Regional Trial Court Decision on July 24, 2013, directing the petitioners to immediately pay the balance of P385,000.00. Accordingly, compensatory interest of 6% per annum begins to run on the balance of P385,000.00 from July 24, 2013 until full payment.
WHEREFORE, the Petition is DENIED. The Court of Appeals Decision dated September 18, 2015 and Resolution dated March 23, 2017 are AFFIRMED. Petitioners Spouses Napoleon and Babylene Escuyos are DIRECTED to immediately pay the balance of P385,000.00 with legal interest of 6% from the promulgation of the Regional Trial Court's Decision on July 24, 2013 until fully paid. They are likewise ORDERED to pay respondents Felicidad Lacostales, Ryan Lacostales, Rose Lacostales, and Ruby Evangelista the sums of P10,000.00 as moral damages, P10,000.00 as exemplary damages, and P10,000.00 as attorney's fees and costs. AaCTcI
SO ORDERED." (Carandang, J., on official leave;Dimaampao, J., designated additional Member per Special Order No. 2839.)
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1.Rollo, pp. 10-20.
2.Id. at 22-27. The September 18, 2015 Decision was penned by Associate Justice Francisco P. Acosta and concurred in by Associate Justice Noel G. Tijam and Associate Justice Maria Elisa Sempio Diy.
3.Id. at 29-30. The March 23, 2017 Resolution was penned by Associate Justice Francisco P. Acosta and concurred in by Associate Justices Maria Elisa Sempio-Diy and Marie Christine Azcarraga-Jacob.
4.Id. at 43-44. The July 24, 2013 Decision in Civil Case No. 09-037 was penned by Presiding Judge Dennis Patrick Z. Perez of Regional Trial Court Branch 67, Binangonan, Rizal.
5.Id. at 22-23.
6.Id. at 23.
7.Id.
8.Id.
9.Id. at 43.
10.Id. at 23.
11.Id.
12.Id. at 43.
13.Id.
14.Id.
15.Id. at 44.
16.Id. at 24.
17.Id.
18.Id. at 25.
19.Id. at 25-26.
20.Id. at 26.
21.Id. at 29.
22.Id. at 10-20.
23.Id. at 68-81.
24.Id. at 90-92.
25.Id. at 16.
26.Id. at 14-15.
27.Id. at 76-77.
28.Id. at 73-75.
29.Id. at 90-92.
30.Id. at 90-91.
31.Cavite Development Bank v. Spouses Lim, 381 Phil. 355, 370 (2000) [Per J. Mendoza, Second Division].
32.Pascual v. Burgos, 776 Phil. 167, 182 (2016) [Per J. Leonen, Second Division].
33. See Juan F. Nakpil & Sons v. Court of Appeals, 228 Phil. 564, 579 (1986) [Per J. Paras, Second Division]. In Nakpil & Sons, we provided the following exceptions, namely, (1) the conclusion is a finding grounded entirely on speculation surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings are contrary to the admissions of both appellant and appellees; (7) the findings of facts of the Court of Appeals are contrary to those of the trial court; (8) said findings of facts are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; (10) the finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by evidence on record . . .
34.Rollo, p. 14.
35.Id. at 15.
36.Philippine Charter Insurance Corp. v. Philippine National Construction Corp., 617 Phil. 940, 951 (2009) [Per J. Brion, Second Division]; United Overseas Bank of the Philippines v. Rosemoor Mining and Development Corp., 560 Phil. 774, 794 (2007) [Per J. Chico-Nazario, Third Division]; BPI Family Bank v. Buenaventura, 508 Phil. 423, 436-437 (2005) [Per J. Austria-Martinez, Second Division].
37.Rollo, p. 69.
38.Id. at 43.
39. 150-B Phil. 770 (1972) [Per J. Fernando, En Banc].
40.Id. at 780.
41. In contrast to a conventional or monetary interest expressly stipulated in the parties' agreement as payment for the use of money. See J. Leonen, Concurring and Dissenting Opinion in Lara's Gifts & Decors, Inc. v. Midtown Industrial Sales, Inc., G.R. No. 225433, August 28, 2019, <https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/65527> [Per J. Carpio, En Banc]; State Investment House, Inc. v. Court of Appeals, 275 Phil. 433, 443-444 (1991) [Per J. Feliciano, Third Division].
42.Arwood Industries, Inc. v. D.M. Consunji, Inc., 442 Phil. 203, 215 (2002) [Per J. Corona, Third Division].
43. 314 Phil. 1 (1995) [Per J. Feliciano, Third Division].
44.Id. at 21.
45.Royal Plains View, Inc. v. Mejia, G.R. No. 230832, November 12, 2018, <https://elibrary.judiciary.gov.ph./thebookshelf/showdocs/1/64745> [Per J. Reyes, Jr., Third Division].
46. Civil Code, art. 1169 provides:
ARTICLE 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins.
47. Art. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.
xxx xxx xxx
A day certain is understood to be that which must necessarily come, although it may not be known when.
48. See State Investment House, Inc. v. Court of Appeals, 275 Phil. 433 (1991) [Per J. Feliciano, Third Division].