THIRD DIVISION
[G.R. No. 243369. November 10, 2021.]
PATRICIA TAN, REP. HEREIN BY HER LEGAL HEIRS, EDGAR TAN, CARMELA MELISSA A. TAN, and CRISTINA ANGELICA A. TAN, petitioner,vs. PLANTERS DEVELOPMENT BANK, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated November 10, 2021, which reads as follows:
"G.R. No. 243369 (Patricia Tan, rep. herein by her legal heirs, Edgar Tan, Carmela Melissa A. Tan, and Cristina Angelica A. Tan, Petitioner, v. Planters Development Bank, Respondent). — This Court resolves this Petition for Review on Certiorari1 which seeks to reverse and set aside the Decision 2 dated 27 June 2018 and Resolution 3 dated 22 November 2018 of the Court of Appeals (CA) in CA-G.R. CV No. 106366. The CA reversed the Decision 4 dated 27 October 2015 of Branch 145, Regional Trial Court (RTC) of Makati City in Civil Case No. 13-541, finding respondent Planters Development Bank (respondent) and Spouses Oscar and Angelita Abel (Spouses Abel) jointly and severally liable to pay petitioner Patricia A. Tan (petitioner) the amount of Seven Million Pesos (Php7,000,000.00), plus legal interest.
Antecedents
Spouses Abel applied for a credit facility with respondent to be secured by a mortgage on a parcel of land located at Don Hernandez Street, San Rafael, Pasay City and covered by Transfer Certificate of Title (TCT) No. 4224 in the name of Arsenio J. Jison (Jison). To support their application, Spouses Abel presented a copy of the Deed of Absolute Sale over the subject property purportedly executed by Jison in their favor. 5
Respondent approved Spouses Abel's credit facility application in a Letter dated 29 June 2010 6 subject to the condition that the title over the said property will be transferred in the name of Spouses Abel with the respondent's mortgage annotated therein. 7
Unable to finance the transfer of the title, Spouses Abel entered into an agreement with petitioner, whereby the latter will finance all costs and expenses to facilitate the transfer of the same. In return, respondent shall issue a letter of guaranty in favor of petitioner.
Accordingly, respondent issued the Letter of Guaranty dated 23 July 2010 8 addressed to petitioner and a certain Fatima D.G. Fuerte, the content of which is quoted hereunder: CAIHTE
We wish to inform you that we have approved a mortgage loan in favor of [SPOUSES] OSCAR and ANGELITA ABEL dbu LOR's FOOD TREATS to be secured by one (1) parcel of land covered by Transfer Certificate of Title No. 4224 located at Don Hernandez Street, San Rafael, Pasay City including all improvements erected thereon which is presently registered under the name of Arsenio J. Jison.
In this connection, we wish to advise you that you can effect the transfer of ownership of the said property under the name of our client SPOUSES OSCAR and ANGELITA ABEL to be followed by the annotation of our mortgage therein.
Upon transfer of ownership and annotation of our mortgage in the new Transfer Certificate of Title, we undertake to remit within seven (7) working days a manager's check as full payment of the borrower's outstanding balance with you as follows:
1. Fatima D.G. Fuerte — P10,000,000
2. Patricia A. Tan — P7,000,000
It is understood that any difference between the stated amount and the actual balance of the obligation of the Spouses Abel shall be settled by them directly with you.
Correspondingly, you shall forward to us the following documents within three (3) days from receipt of our check payments:
1. Original Transfer Certificate of Title registered under the name of Spouses Oscar and Angelita Abel free from other lien and other encumbrance except our mortgage annotated thereon;
2. Original copy of the Tax Declaration on land and improvement, if any, under the name of Spouses Oscar and Angelita Abel;
3. Original copy of the 2010 Real Estate Tax receipts for land and improvement, if any;
4. Copy of BIR Certification Authorizing Registration (Emphasis supplied.)
On 26 July 2010, TCT No. 151615 was issued in the name of Spouses Abel and TCT No. 42247 was cancelled. The Real Estate Mortgage in favor of respondent executed on 05 August 2010 was annotated in the new title on the same date. Consequently, respondent made a partial release of the loan proceeds to Spouses Abel on 10 August 2010. 9
Meanwhile, on 24 August 2010, 10 petitioner submitted the required documents under the Letter of Guaranty, the receipt of which was acknowledged 11 by respondent. Petitioner thereafter demanded from the respondent the release of Php7,000,000.00 as provided in the Letter of Guaranty. 12
Conflict arose when respondent refused to release the stipulated amount to petitioner on the ground that the former discovered a cloud in the title of Spouses Abel over the mortgaged property. It appears that respondent received a Letter dated 09 August 2010 from a certain Atty. Rodinil Bugay (Atty. Bugay) informing respondent that the sale of the subject property to Spouses Abel was void, since Jison died years before the sale was executed. 13
This prompted petitioner to file an administrative case before the Bangko Sentral ng Pilipinas (BSP) against the bank officers who signed the Letter of Guaranty for committing unsafe and unsound banking practices. The BSP dismissed the administrative complaint in a Resolution dated 13 January 2012 (BSP Resolution). 14
Petitioner then filed a Complaint for sum of money and damages before the RTC, praying that respondent and Spouses Abel be held jointly and severally liable to pay the amount stipulated in the Letter of Guaranty. 15
For its part, respondent argues that the right of the petitioner under the Letter of Guaranty flows from the Spouses Abel's Loan Agreement with respondent. As such, its refusal to release the claimed amount was justified by the failure of Spouses Abel and/or petitioner to meet the conditions in the Letter of Guaranty in view of the liens or encumbrances annotated in TCT No. 151615 and the serious doubt on the validity of the transfer of ownership from Jison to Spouses Abel. Respondent likewise instituted a cross-claim against Spouses Abel and notified the trial court of the Deed of Undertaking executed by Spouses Abel where they agreed to be made ultimately liable for the claims of petitioner. 16
On the other hand, Spouses Abel averred that petitioner had no cause of action against them under the Letter of Guaranty. 17
Ruling of the RTC
In a Decision dated 27 October 2015, the RTC ruled in favor of petitioner, thus:
WHEREFORE, finding the evidence adduced sufficient to prove the liabilities of defendant Planters Development Bank and defendant Spouses Oscar and Angelita Abel to the plaintiff, judgment is herein rendered in favor of the plaintiff and against said defendants holding both of the defendants jointly and severally liable to pay the plaintiff, Patricia A. Tan the amount of Seven Million Pesos (Php7,000,000.00) plus legal interest thereon at the rate of 6% computed from the demand letter dated August 26, 2010 (Exhibit "C") until full payment thereof.
As to the prayer for moral and exemplary damages, as well as attorney's fees, no award thereon is granted for lack of evidence thereon.
Cost of Suit against defendant spouses Oscar and Angelita Abel.
As to the cross-claim of defendant Planters Development Bank against defendant Spouses Oscar and Angelita Abel, the latter is held liable to reimburse and pay the former whatever amount the bank is made liable to pay the plaintiff under this judgment.
SO ORDERED. 18
The RTC found respondent liable to pay petitioner the sum of Php7,000,000.00. It ratiocinated that petitioner complied with the conditions under the Letter of Guaranty when she submitted to respondent the original owner's duplicate copy of TCT No. 151615 in the name of Spouses Abel with respondent's Real Estate Mortgage annotated therein, the receipt of which was undisputed. 19
On the other hand, the RTC rejected respondent's contention that the Letter of Guaranty was subject to a suspensive condition, i.e., the validity of the mortgage over the subject property, stating that there was nothing in the guaranty agreement that provides for the same. Thus, any other evidence adduced that tends to change the tenor of stipulations therein was contrary to the parole evidence rule under Section 9 of Rule 130 of the Rules of Court. 20 DETACa
Further, the RTC applied the doctrine of last clear chance in finding respondent negligent for not exerting extraordinary diligence required of banks. The RTC faulted respondent for failing to verify the authenticity of the sale of the subject property to Spouses Abel and for failing to immediately inform petitioner of the Letter of Atty. Bugay, prior to the approval of the subject collateral and the partial release of loan thereon to Spouses Abel. The RTC added that respondent cannot use the BSP Resolution to absolve itself from any liability since the ruling therein is limited to the administrative liability of the bank officers and not that of the bank. 21
Ruling of the CA
On appeal, the CA ruled in favor of respondent in the Decision dated 27 June 2018, the dispositive portion of which reads:
WHEREFORE, premises considered, the Decision dated October 27, 2015 of the Regional Trial Court of Makati City, Branch 145, in Civil Case No. 13-541 is hereby REVERSED and SET ASIDE. The complaint filed by Patricia A. Tan is hereby dismissed for lack of merit.
SO ORDERED. 22
The CA treated the Letter of Guaranty as an innominate contract and not a contract of guaranty under Article 2047 of the Civil Code, considering the absence of any express undertaking by respondent to pay the Spouses Abel's debt to petitioner in case of default. It then concluded that respondent was not obligated to release the loan amount to petitioner considering that the release of the same was conditioned upon a valid mortgage, which was not obtaining in this case. The CA likewise considered in favor of respondent the BSP Resolution, absolving respondent's bank officers. 23
Petitioner moved for reconsideration, which was denied by the CA in the Resolution dated 22 November 2018. 24
Hence, this instant petition.
Issues
Petitioner seeks a reversal of the CA Decision and raises the following issues for resolution:
1. The CA gravely erred and acted contrary to law and settled jurisprudence in reversing the Decision dated 27 October 2015 of the RTC and ruling that respondent is not contractually obligated to release the amount of Seven Million Pesos (Php7,000,000.00) to petitioner despite the fact that both parties are reciprocally bound by laws to fulfill their respective obligations.
2. The CA gravely erred and acted contrary to law in allowing a collateral attack on the validity of the title of the mortgaged property.
3. The CA gravely erred and acted contrary to law when it relied on the resolution of the BSP which dismissed the administrative case filed against the officers of respondent to support its decision against petitioner. 25
Stripped of the nonessentials, the main issue in this case is whether respondent is liable to pay petitioner the amount of Php7,000,000.00 pursuant to the Letter of Guaranty.
Ruling of the Court
It is clear under Section 1, Rule 45 of the Rules of Court that only questions of law are allowed under a petition for review on certiorari. There is a question of law when there is doubt or controversy as to what the law is on a certain state of facts, while a question is one of fact when the doubt or difference arises as to the truth or falsehood of facts, or when the resolution of the issue raised requires a calibration of the whole evidence. 26
A careful reading of the present petition reveals that the Court is being asked to determine whether petitioner has fully complied with her obligations under the Letter of Guaranty, which would give rise to the obligation of respondent to release the amount stipulated therein. Evidently, this is a question of fact since it requires the examination of the evidence presented in the lower courts.
The Court is not a trier of facts and it is not its duty to review, evaluate, and weigh the probative value of the evidence adduced before the lower courts. 27 However, the rules admit exceptions, such as when the findings of the CA are contrary to those of the trial court, as in this case. 28
Petitioner impresses upon this Court the factual findings of the RTC that she has complied with the conditions stipulated in the Letter of Guaranty; specifically, the transfer of title in the name of Spouses Abel and annotation of respondent's mortgage thereon. Having complied with said conditions, respondent is now obligated to release the amount of Php7,000,000.00 in favor of petitioner. 29
On the other hand, respondent maintains that the CA correctly ruled that the refusal to release the claimed amount is justified since the conditions for the release of the same have not been satisfied. Respondent argues that the Letter of Guaranty was issued as a consequence of the credit line agreement between respondent and Spouses Abel. Hence, the obligation in the former is subject to a suspensive condition: a valid security. Consequently, the adverse claim on the property constituted a supervening event justifying its refusal to release the money to petitioner. 30 aDSIHc
The Court agrees with petitioner.
Under the parole evidence rule, when the terms of an agreement are reduced to writing, it is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted other than the contents of the agreement itself. 31 Indeed, it is not the province of the courts to amend a contract by construction, or to make a new contract for the parties by interjecting material stipulations, or even to read into the contract words which it does not contain. 32
While there are exceptions 33 to the said rule, none was alleged or proved in this case, as aptly noted by the RTC. Accordingly, the RTC correctly referred to the Letter of Guaranty alone to determine the conditions for the release of the amount claimed and petitioner's compliance with its terms. Consequently, the CA's finding that the Letter of Guaranty is anchored on the validity of the mortgage over the subject property is erroneous since there is nothing in its terms providing for the said condition.
Under the Letter of Guaranty, the only conditions for the release of the money to petitioner are (1) the transfer of ownership and (2) the annotation of respondent's mortgage in the new Transfer Certificate of Title, 34 to be evidenced by the submission of documents, including the Original Transfer Certificate of Title registered under the name of Spouses Oscar and Angelita Abel free from other lien and other encumbrance except the mortgage annotated thereon. 35
As found by the RTC, petitioner has fulfilled the stipulated conditions under the Letter of Guaranty. Notably, while the CA resolved the case in favor of respondent, it made no finding as to the compliance of petitioner to the stipulations in the Letter of Guaranty.
Respondent's claim that petitioner failed to comply with the conditions in the Letter of Guaranty in view of the adverse claim annotated at the back of TCT No. 151615 should be rejected. In the first place, the RTC's factual findings as regards petitioner's compliance with the Letter of Guaranty was uncontradicted by the CA. Further, while the Letter of Guaranty requires that the title to be submitted should be free from lien and other encumbrance except for respondent's mortgage, it is undisputed that respondent accepted, without any qualification, the original owner's duplicate copy of TCT No. 151615. 36 Respondent's unqualified acceptance of the title submitted by petitioner shows that it deems said submission to be compliant with the conditions under the Letter of Guaranty.
Indeed, it is settled that banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. 37 However, respondent cannot be permitted to justify its refusal to honor its obligation to petitioner by claiming that it is exercising the diligence required of it. Such diligence should have been exercised by respondent before the approval of the mortgage loan of Spouses Abel and prior to instructing petitioner to effect the transfer of the subject property. Extraordinary diligence should have been employed to prevent fire, not to extinguish one.
Anent the use of the findings of the BSP in favor of respondent, suffice it to say that the same cannot be the basis to exculpate respondent from its obligation under the Letter of Guaranty, since the ruling therein is limited to the administrative liability of the bank officers involved in the transaction. The BSP made no findings as to the compliance or non-compliance by petitioner to the conditions under the Letter of Guaranty for the simple reason that the same was not an issue in the administrative proceeding.
WHEREFORE, premises considered, the petition is GRANTED. The Decision dated 27 June 2018 and Resolution dated 22 November 2018 of the Court of Appeals in CA-G.R. CV No. 106366 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated 27 October 2015 of Branch 145, Regional Trial Court of Makati City in Civil Case No. 13-541 is REINSTATED.
SO ORDERED." (Dimaampao, J., no part, due to his prior action in the Court of Appeals; Lopez, M., J., designated as additional Member per Special Order No. 2839-C dated October 8, 2021.)
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1. Rollo, pp. 33-56.
2. Id. at 58-71; penned by Associate Justice Jhosep Y. Lopez (now a Member of this Court) and concurred in by Associate Justices Japar B. Dimaampao (now a Member of this Court) and Manuel M. Barrios of the Seventh Division, Court of Appeals, Manila.
3. Id. at 72-73.
4. Id. at 209-221; penned by Presiding Judge Carlito B. Calpatura.
5. Id. at 13.
6. Id. at 128-130.
7. Id. at 129.
8. Id. at 137.
9. Id. at 138.
10. Id. at 191.
11. Id.
12. Id. at 192.
13. Id. at 62.
14. Id.
15. Id. at 63.
16. Id. at 213-214.
17. Id. at 63.
18. Id. at 221.
19. Id. at 63-64.
20. Id. at 217.
21. Id. at 219.
22. Id. at 70.
23. Id. at 67.
24. Id. at 72-73.
25. Id. at 41-42.
26. Central Bank of the Philippines v. Castro, 514 Phil. 425 (2005) [Per J. Puno].
27. Frondarina v. Malazarte, 539 Phil. 279 (2006) [Per J. Velasco, Jr.].
28. BP Oil and Chemicals International Philippines, Inc. v. Total Distribution & Logistics Systems, Inc., 805 Phil. 244 (2017) [Per J. Peralta].
29. Id. at 42-43.
30. Id. at 336.
31. See Rules of Court, Rule 130, Section 9.
32. Spouses Sabio v. International Corporate Bank, 416 Phil. 785 (2001) [Per J. Ynares-Santiago].
33. Section 9, Rule 130 of the Rules of Court provides the following exceptions to the parole evidence rule:
a. An intrinsic ambiguity, mistake or imperfection in the written agreement;
b. The failure of the written agreement to express the true intent and agreement of the parties thereto;
c. The validity of the written agreement; or
d. The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.
34. Supra at note 6.
35. Id.
36. Supra at note 7.
37. Philippine Trust Company v. Court of Appeals, 650 Phil. 54 (2010) [Per J. Leonardo-de Castro].