FIRST DIVISION
[G.R. No. 170489. August 17, 2016.]
SPOUSES EDWIN AND NANCY LASCANO, petitioners, vs. M.A.O. LENDING INVESTORS, INC., JOSE DEL CASTILLO and JESUS I. DUNGCA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated August 17, 2016, which reads as follows:
"G.R. No. 170489 — SPOUSES EDWIN AND NANCY LASCANO, Petitioners, v. M.A.O. LENDING INVESTORS, INC., JOSE DEL CASTILLO and JESUS I. DUNGCA, Respondents.
This appeal is taken by the petitioners against the decision promulgated on June 28, 2005 in C.A.-G.R. CV No. 76774, 1 whereby the Court of Appeals (CA) affirmed the judgment rendered on August 13, 2002 in Civil Case No. Q-01-45078 entitled Spouses Edwin and Nancy Lascano v. M.A.O. Lending Investors, Inc., Jesus I. Dungca and Jose del Castillo by the Regional Trial Court (RTC), Branch 218, in Quezon City. 2
Antecedents
The CA adopted the following summation of the antecedents contained in the decision of the RTC, to wit:
It would appear that sometime in 1995, plaintiff Edwin P. Lascano delivered Transfer Certificate of Title Nos. T-48604 and 182887 to defendants in order to secure a loan obligation in the sum of Php300,000.00 incurred by plaintiff-spouses Edwin and Nancy Lascano and a certain Virgilio M. Supan.
The loan obligation was settled sometime in December of the same year but plaintiff Edwin Lascano was unable to get back the mentioned titles immediately after the date of settlement for reasons of business preoccupation.
In the year 1996, plaintiff Edwin Lascano visited the defendants for the purpose of retrieving the titles but its return was refused on the following grounds, to wit:
1) With respect to plaintiff Edwin's title, the same shall continue to secure the obligation of Mr. Supan under the rediscounting agreement, the rediscounted personal check issued in the name of Rajen-C Services (a company owned by the latter) having been dishonored; and
2) Anent the title of (plaintiff) Nancy, it shall be held first in trust until such time that Mr. Supan could deliver a substitute security.
over the objection of (plaintiff) Edwin. DACcIH
On 14 October 1998, defendant corporation (plaintiff therein) filed a case for Foreclosure of Mortgage and Sum of Money with Damages against herein plaintiffs (including Mr. Virgilio Supan) docketed as Civil Case No. Q-98-3510 (sic- should be 35810) alleging, among others, that plaintiff Edwin Lascano (defendant therein) and Mr. Virgilio Supan have an accumulated indebtedness of Php1,308,190.44 as of 28 February 1998 payable to defendant (plaintiff therein) M.A.O. Lending Investors, Inc., and to secure payment thereof, plaintiff (defendant therein) Edwin Lascano surrendered original copies of Transfer Certificates of Titles Nos. 182887 and T-48604.
In an Order dated 20 August 1999, plaintiff therein was directed to take necessary steps to prosecute (the) case within five (5) days from receipt of (such) Order; otherwise, (the) case will be ordered dismissed."
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Now claiming that their liability under the rediscounting agreement, if any has been extinguished by reason of the dismissal of Civil Case No. 35810, plaintiff pursued the return of the titles, further asserting that plaintiff Nancy Lascano did not have any participation in any transaction entered into with herein defendant corporation.
Several demands to this end were made, the last of which was on 28 July 2001, per letter of even date, but all remained unheeded. Hence, this suit, additionally seeking for the award of actual, moral, and exemplary damages, exclusive of attorney's fees, appearance fees, litigation expenses and cost of suit."
Defendant M.A.O. Lending Investor's did not file an Answer or any responsive pleading, thus, plaintiff filed a Motion to Declare Defendant in Default [Record, p. 147] which was granted by the Court a quo, through its Order dated May 10, 2002. Thus:
Atty. Winston P. L. Esguerra, appearing for the movant, manifested that the defendant M.A.O. Lending Corp. failed to file its answer despite service of summons and the lapse of period required for them to file responsive pleading. The Motion to Declare Defendant in Default is GRANTED.
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Thus, an ex parte presentation of evidence ensued. 3 . . . (Citations omitted)
As stated, the RTC rendered its decision on August 13, 2002 upon considering the sole issue of: —
. . . whether or not plaintiff's obligation has been extinguished and hence, demand delivery of the titles used as collaterals thereof. Put differently, should defendants be ordered to return the titles registered under the names of plaintiffs and corollarily claim damages? 4
and disposing thusly:
WHEREFORE, premises considered, this Court hereby renders judgment in favor of plaintiff Nancy Lascano and against defendants M.A.O. Lending Investors, Inc., Jesus I. Dungca and Jose del Castillo, the latter in their official capacities, by ordering as follows:
1) Defendants to return the title of plaintiff Nancy Lascano (re: Transfer Certificate of Title No. 182887) without prejudice to any substitution of such collateral that maybe (sic) made upon its return within thirty (30) days from finality of this decision; HSCATc
2) Defendants to pay plaintiffs the sum of Php50,000.00 as and for attorney's fees plus appearance fees of P2,500.00 per appearance;
3) Defendants to pay plaintiffs' litigation expenses and costs of suit.
SO ORDERED. 5
On appeal, the petitioners interposed the following issues:
I.
THE COURT A QUO ERRED IN NOT RULING THAT PLAINTIFF-APPELLANT EDWIN LASCANO'S OBLIGATION HAD ALREADY BEEN EXTINGUISHED BY THE DISMISSAL WITH PREJUDICE OF CIVIL CASE NO. Q-98-35810.
II.
THE COURT A QUO ERRED IN NOT RULING THAT THE PLAINTIFFS-APPELLANTS ARE ENTITLED TO ACTUAL DAMAGES.
III.
THE COURT A QUO ERRED IN NOT RULING THAT THE PLAINTIFFS-APPELLANTS ARE ENTITLED TO MORAL AND EXEMPLARY DAMAGES.
IV.
THE COURT A QUO ERRED IN NOT RULING THAT THE PLAINTIFFS-APPELLANTS ARE ENTITLED TO AN INCREASE IN THE AWARD OF ATTORNEY'S FEES. 6
On June 28, 2005, the CA, observing that:
The Court a quo opined that the dismissal of Civil Case No. Q-98-35810 filed by M.A.O. Lending Investors, Inc. against herein plaintiffs "does not definitely obliterate the fact that plaintiffs are indebted to defendant corporation. As a matter of fact, defendants may proceed to collect judicially or extrajudicially." [Record, p. 247; Decision, dated August 13, 2002, p. 6]. The Court a quo also opined that with respect to plaintiff Nancy Lascano, "(s)he does not appear to be a signatory in any of the documents executed in favor of defendant corporation. In other words, there is no showing that she had a participation in any of the transactions (i.e., loan and mortgage transactions)." [Record, p. 248; Ibid., p. 7]. The Court a quo did not grant plaintiffs' prayer for the award of actual damages, moral and exemplary damages. However, defendants were ordered by the Court a quo to return to plaintiff Nancy Lascano her title and to pay attorney's fees, litigation expenses and costs of suit. 7
affirmed the assailed decision of the RTC, viz.:
WHEREFORE, premises considered, the appeal is hereby DISMISSED and the Decision, dated August 13, 2002, rendered by Branch 218 of the Regional Trial Court of Quezon City is hereby AFFIRMED.
SO ORDERED. 8
The petitioners' motion for reconsideration was denied by the CA for lack of merit. 9
Hence, Spouses Lascano appeal seeking the reversal of the decision of the CA by arguing that res judicata or dismissal with prejudice had extinguished the obligation. 10 IDTSEH
In his comment and opposition, Jesus I. Dungca (Dungca) counters that the obligation subsists; 11 that the invocation of res judicata is misplaced; 12 that even granting that res judicata is not misplaced, it cannot be applied against the subject TCTs inasmuch as there were other existing and distinct causes of action respecting the same in favor of M.A.O Lending Investors, Inc.; 13 and that granting finally that res judicata can be invoked by the petitioners, the same cannot override the legal and equitable doctrine against unjust enrichment. 14
Spouses Lascano reiterated in its reply that res judicata applies. 15
Ruling of the Court
We affirm the decision of the CA.
First of all, the appeal involves factual issues that cannot be proper for appeal by petition for review on certiorari. Section 1, Rule 45 of the Rules of Court explicitly states that the petition for review on certiorari "shall raise only questions of law, which must be distinctly set forth." In appeal by certiorari, therefore, only questions of law may be raised, because the Court, not being a trier of facts, does not normally undertake the re-examination of the evidence presented during the trial. The resolution of factual issues is the function of the lower courts, whose findings thereon are received with respect and are binding on the Court subject to certain exceptions. A question, to be one of law, must not involve an examination of the probative value of the evidence presented by the litigants or any of them. There is a question of law in a given case when the doubt or difference arises as to what the law is on certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or falsehood of alleged facts. 16
Nonetheless, several exceptions to the rule have been recognized, including: (a) when the findings are grounded entirely on speculation, surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of facts are conflicting; (f) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (g) when the findings are contrary to those of the trial court; (h) when the findings are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (j) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (k) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. 17 However, none of the foregoing exceptions is present herein to warrant the review of the factual findings by the trial court that have been affirmed by the CA.
Even so, we find that the CA's findings are in full accord with the law and jurisprudence in disposing of the appeal before it, as follows:
The appeal is devoid of merit.
Anent the first assignment of error, the court a quo had explained why the obligation of plaintiff-appellee Edwin Lascano cannot be considered as extinguished. We quote the Court a quo:
"There is no showing, however, that the Php300,000 loan of the plaintiffs and Mr. Supan was indeed paid. What was adduced during the ex parte hearing was a Cash Voucher showing the partial release of the loan in the sum of Php150,000.00 to plaintiff Edwin Lascano (Exh. "K"). Nothing more. Thus, extinguishment of the obligation through payment is ruled out. (Even then, there are doubts as to the real amount of the loan incurred by plaintiff Edwin Lascano and Mr. Virgilio Supan. While in his complaint and during his testimony, plaintiff Edwin Lascano maintained that their obligation only amounts to Php300,000.00, the complaint docketed as Civil Case No. Q-98-35810) refers to an accumulated loan of Php971,469.02, later increased to Php1,308,109.44. The former amount is further reflected in a Promissory Note dated 03 August 1996 (Annex "A" of the Complaint); Promissory Note dated 30 September 1996 (annex "D" of the Complaint); and Deed of Real Estate Mortgage (Annex "E" of the Complaint). The latter amount on the other hand, is indicated in a Notice (of payment due) dated 28 February 1998 (Annex "F" of the Complaint). SICDAa
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At this juncture, it is worthy to stress that Art. 1231 of the new Civil Code only recognizes six (6) modes of extinguishing an obligation, in addition to annulment, rescission, fulfillment of a resolutory condition and prescription. They are:
1) payment of performance;
2) loss of the thing due;
3) condonation or rescission of the debt;
4) confusion or merger of the rights of creditor and debtor;
5) compensation; and
6) novation.
Clearly, dismissal of the case does not fall under any of the foregoing enumeration. The dismissal, though, may have the effect of barring herein defendants from instituting a similar case against herein plaintiffs, but it does not definitely obliterate the fact that plaintiffs are indebted to defendant corporation. As a matter of fact, defendants may proceed to collect judicially or extrajudicially.
Prescription cannot even be invoked as against defendants. The loan was obtained in 1995. On the presumption that documents were executed in connection thereto in the same year, prescription has not yet set it, an action based on a written contract being required to be filed within ten (10) years from the time the right of action accrues. (The Promissory Notes and the Deed of Real Estate Mortgage, though appears to be executed wayback (sic) in 1996, per Complaint docketed as Civil Case No. Q-98-35810). [Record, pp. 246 and 247; Decision, dated August 13, 2002, pp. 5 and 6; Emphasis supplied]
The Court agrees with the Court a quo that the dismissal of Civil Case No. Q-98-35810 did not obliterate the obligations of plaintiff-appellant Edwin Lascano. Verily, said case was dismissed due to therein plaintiff's failure to prosecute. Obviously, the trial court in Civil Case No. Q-98-35810 did not and could not have ruled that herein plaintiffs-appellants had no more obligations to herein defendant corporation or that said obligations had already been paid or extinguished. The order of dismissal of the trial court in Civil Case No. Q-98-35810 did not have such pronouncement.
With regard to the second, third and fourth assignment of errors, We shall jointly discuss the same for being interrelated.
Anent plaintiffs-appellants' claim for actual damages, We opine that plaintiffs-appellants are not entitled thereto. Settled is the rule that "(t)o recover actual damages, the amount of loss must be proven with competent proof or the best evidence obtainable (citing People v. Leal, 411 Phil. 465), and an indefinite cost-estimate cannot suffice." [Gabriel vs. Court of Appeals, G.R. No. 128474, October 6, 2004.]
In the case at bench, the Court a quo observed that the documents shown by plaintiffs-appellants in support of their claim for actual damages purporting to be the equivalent amount they lost as income, such as those in connection with the application for the issuance of a Certificate of Public Convenience, receipts and a Job Contract, "are however insufficient to award actual damages of this sort. These documents cannot prove how much would be the probable income that may be obtained had plaintiffs been able to expand their business." [Record, p. 249; Decision, dated August 13, 2002, p. 8] Besides, how could they claim for actual damages when the Court a quo did not declare that plaintiffs were no longer indebted to defendants, and for the same reason, moral and exemplary damages cannot and should not be awarded. 18 DHIcET
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on June 28, 2005; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED."
Very truly yours,
(SGD.) EDGAR O. ARICHETADivision Clerk of Court
Footnotes
1. Rollo, pp. 31-38; penned by Associate Justice Edgardo F. Sundiam (retired/deceased), with Associate Justice Renato C. Dacudao and Associate Justice Japar B. Dimaampao concurring.
2. Id. at 104-112; penned by Presiding Judge Hilario L. Laqui.
3. Id. at 32-34.
4. Id. at 107.
5. Id. at 112.
6. Id. at 159-160.
7. Id. at 32-34.
8. Rollo, p. 38.
9. Id. at 38.
10. Id. at 16.
11. Id. at 270.
12. Id. at 274.
13. Id. at 280.
14. Id. at 281.
15. Id. at 318-327.
16. Angeles v. Pascual, G.R. No. 157150, September 21, 2011, 658 SCRA 23, 28-29.
17. Id. at 29-30.
18. Rollo, pp. 35-37.