Velez, Jr. v. Santillan-Baens, Inc.

THIRD DIVISION

[G.R. Nos. 244182-83. June 3, 2019.]

JOSE MARI VELEZ, JR., petitioner, vs.SANTILLAN-BAENS, INC., respondent.

[G.R. No. 244237. June 3, 2019.]

APOLONIO C. QUESADA, JR., petitioner, vs.SANTILLAN-BAENS, INC., JOSE S. BAENS, HECTOR S. BAENS, GLORIA BAENS-RAMIREZ AND AIDA BAENS-LLACUNA, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution datedJune 3, 2019, which reads as follows:

"G.R. Nos. 244182-83 (Jose Mari Velez, Jr. v. Santillan-Baens, Inc.) and G.R. No. 244237 (Apolonio C. Quesada, Jr. v. Santillan-Baens, Inc., Jose S. Baens, Hector S. Baens, Gloria Baens-Ramirez and Aida Baens-Llacuna). — Santillan-Baens, Inc. (SBI) is a closed family corporation established in 1967 by siblings Dr. Jose S. Baens, Dr. Hector S. Baens, Dr. Gloria Baens-Ramirez, and Dr. Aida Baens-Llacuna (Baens siblings). Their parents bought a parcel of land (subject property) which is covered by Transfer Certificates of Title (TCTs) Nos. 90421 and 90422 in the name of SBI and is located in Sampaloc, Manila, where St. Paul Hospital stands. The property was declared for taxation purposes in the name of SBI and the real estate taxes due thereon are being paid for by the Baens siblings.

On March 1, 2001, a notarized Deed of Real Estate Mortgage (REM) dated February 28, 2001, was annotated on the TCTs for the subject property which was supposedly used as collateral to secure a loan of SBI amounting to PhP15 Million payable one month after or on March 28, 2001, with 5% interest. The REM was purportedly executed between mortgagor SBI, represented by Manuel N. de Castro (De Castro) in his capacity as SBI Treasurer, and mortgagees Avelina Navarez (Navarez) and Leonardo Dimaculangan (Dimaculangan). There were other contracts and documents submitted which allegedly supported the existence of the REM, to wit: several Memoranda of Agreement (MOA) supposedly individually executed by the Baens siblings wherein each of them sold their respective shares in SBI to Saturn Resources, Inc. (SRI), represented by Emmanuel Deles (Deles); a Secretary's Certificate signed by Jose Mari S. Velez, Jr. (Velez), Corporate Secretary; Minutes dated February 15, 2001, of the SBI Board Meeting during which Deles, De Castro, Velez, and Emilio P. Villamayor (Villamayor) were present and authority was given to De Castro to execute the REM; and a promissory note executed by De Castro, representing SBI, which pertained to the PhP15 Million loan. cHaCAS

After discovery of the existence of the REM, SBI and the Baens siblings filed on March 28, 2001, with the Regional Trial Court (RTC) of Manila, Branch 37, a Complaint for annulment and/or declaration of nullity of the purported contracts with prayer for temporary restraining order/injunction as well as damages against SRI, De Castro, Villamayor, Velez, Navarez, Dimaculangan, and the Register of Deeds (RD) of Manila. They subsequently filed an Amended Complaint to include Deles and Antonio Bautista (Bautista), the supposed Chairman of SRI, as defendants. Essentially, SBI and the Baens siblings refuted the validity of the contracts and documents as their signatures therein were allegedly forged. They averred that although the REM was annotated on the original TCTs with the RD, the certificates of title which remained in their possession were never required to be surrendered. Hence, they claimed that the mortgage was void ab initio.

Velez and Bautista, retained counsel of SRI, denied any participation in the transaction with the Baens siblings and asserted that they were mere nominees in SRI of Mario Villamor (Villamor), the one who formed SRI in 1999.

SRI, Deles, De Castro, and Villamayor all denied that they committed fraud and malice. They alleged that sometime in 2000, George Cadhit (Cadhit), a businessman/broker, offered a property located on Dela Fuente Street, Manila, the site of St. Paul Hospital, for sale and/or joint venture. SRI trusted Cadhit as he had previously brokered a PhP200 Million real estate transaction for the corporation. SRI and Cadhit had a tentative agreement for the payment of PhP20 Million as down payment with the balance payable within 12 months. Velez was to be responsible for the documentation of the acquisition by SRI of the SBI property, but eventually, it was settled that SRI would just buy the shares of stock of SBI since the subject property was its only asset. Velez supposedly prepared the MOA, but Cadhit revealed that the subject property was mortgaged to a private individual for PhP10 Million. Cadhit guaranteed, however, that if SRI could produce the money and redeem the property, the signed MOA and the TCTs would be delivered to SRI. Navarez and Dimaculangan agreed to loan PhP14 Million and PhP1 Million, respectively, to SRI, provided that the REM would be executed at the agreed interest rate. Payment of the SBI shares of stock would then be made upon the recording of the sale of the said shares with the Securities and Exchange Commission (SEC). After Cadhit delivered the notarized MOA and the duplicate TCTs to SRI, Velez undertook the recording of the sale of the SBI shares with the SEC, prepared the Minutes, and executed the Secretary's Certificate. After receipt of the loan proceeds, the REM was executed in favor of Navarez and Dimaculangan and the duplicate TCTs were delivered to them. Navarez and Dimaculangan thereafter registered the REM with the RD.

Navarez admitted that she granted a loan in the amount of PhP14 Million to SBI, through Dimaculangan, and was given copies of the TCTs for the subject property as security. Villamor issued post-dated checks to Dimaculangan for the amount of the loan, but these checks were later dishonored for the reason "closed account." Navarez asserted that she granted the loan in good faith and for value and that the REM was valid. After discovery of the case instituted by the Baens siblings before the RTC, she verified the genuineness of the TCTs again and discovered differences in her copy versus the copies presented by the RD and SBI. Dimaculangan, Navarez's co-mortgagee, adopted the latter's allegations. Navarez filed a separate criminal complaint against Dimaculangan, Diokno Dimaculangan, Imelda Dimaculangan, Deles, De Castro, Villamayor, and Villamor.

Navarez passed away during the pendency of the case before the RTC and was substituted by her heirs.

In a Decision 1 dated October 10, 2014, the RTC ruled in favor of SBI and the Baens siblings, and decreed thus:

WHEREFORE, judgment is hereby rendered, as follows:

On the complaint:

1) Declaring the five (5) Memorandum of Agreements all dated January 16, 2001 and the Real Estate Mortgage contract dated February 25, 2001 as null and void ab initio. The Register of Deeds of Manila is directed to cancel Entry No. 5006 in TCT Nos. 90421 and 90422 on file in its office;

2) Ordering defendants to jointly and severally pay plaintiffs the sum of One Million Pesos (Php1,000,000.00) as moral damages, and another Five Hundred [Thousand] Pesos (Php500,000.00) as exemplary damages;

3) Ordering defendants to jointly and severally pay plaintiffs the sum of One Hundred [Thousand] Pesos (Php100,000.00) as and for attorney's fees and costs of suit; and DACcIH

4) Dismissing defendants' counterclaims against plaintiffs, for lack of merit.

On the Cross-claims:

1) Directing defendants Saturn, Deles, Villamor, Villamayor and De Castro to reimburse defendant Navarez or her substituted heirs and Dimaculangan the amount of Fourteen Million Pesos (Php14,000,000.00) and One Million Pesos (Php1,000,000.00), respectively, with twelve per cent (12%) interest per annum from the filing of this complaint and such sum shall earn another twelve per cent (12%) interest per annum from finality until full satisfaction; and

2) Dismissing the respective cross-claims of defendants Saturn, Deles, Villamor, Villamayor, and De Castro and defendants Bautista and Velez, Jr. for lack of merit.

On the Third-Party Complaints:

1) Dismissing the Third Party Complaints of defendants Bautista and Velez, Jr. against defendant Mario Villamor for lack of merit. 2

The RTC held that based on the totality of evidence, the MOA allegedly executed by the Baens siblings through which they purportedly sold their SBI shares to SRI were simulated, fictitious, and had no consideration. It particularly observed that: (a) it is noticeable that the signatures of Jose Baens on the MOA were different from the ones in his passports; (b) the statements of Velez and Bautista that they had no part in the execution of the Minutes of the Meeting of the SBI Board of Directors, which supposedly took place on February 15, 2001, and during which it was allegedly resolved that the subject property be mortgaged, debunk the position of SRI, Navarez, Dimaculangan, and Villamor, as well as strengthen the Baens siblings' allegations of irregularities in the transfer of their shares of stock; (c) the MOA were not registered in the Stock and Transfer Book of SBI; and (d) there was no evidence that the Baens siblings received any consideration for the supposed sale of their SBI shares.

The RTC also found that Navarez and Dimaculangan could not be considered mortgagees-in-good-faith as they merely relied on the genuineness and due execution of the Minutes of the SBI Board Meeting and the Secretary's Certificate presented to them by Villamor. Their full reliance on Villamor's alleged authority and on the identity of the prospective mortgagors or real owners of the subject property without undertaking further investigation militate against their claim of being mortgagees-in-good-faith and for value.

The parties challenged the foregoing RTC Decision.

Navarez's substituted heirs and Dimaculangan filed separate Notices of Appeal.

Velez and Bautista filed a joint Motion for Partial Reconsideration which was denied by the RTC in an Order dated January 14, 2015. Thereafter, they also filed their Notices of Appeal.

Meanwhile, SBI and the Baens siblings filed a Motion for Execution Pending Appeal which the RTC denied in an Order dated January 21, 2015. When the RTC also denied their Motion for Reconsideration in an Order dated April 6, 2015, SBI and the Baens siblings filed a Petition for Certiorari before the Court of Appeals.

Acting on the appeals of Navarez's substituted heirs, Dimaculangan, Velez, and Bautista, and the Petition for Certiorari of SBI and the Baens siblings, the Court of Appeals promulgated its Decision 3 dated April 27, 2018, the dispositive portion of which reads:

WHEREFORE, the appeals in CA-G.R. CV No. 104539 are all DENIED and the Decision dated October 10, 2014 is hereby AFFIRMED. The petition in CA-G.R. SP No. 140938 is DISMISSED and the Orders dated January 21, 2015 and April 6, 2015 are hereby AFFIRMED. 4

The Court of Appeals held that there was no valid transfer of SBI shares. Evidence established the fraudulent character of the MOA because the Baens siblings did not sign them and they did not transact with any of the SRI officers or their brokers. It similarly found that Jose Baens's purported signatures on the MOA were forged since these were manifestly different from his genuine signature on his passport. The appellate court stressed that all transfers of shares of stock must be registered in the corporate books in order to be binding on the corporation.

The appellate court further declared that the REM was null and void because there was no valid transfer of ownership of SBI shares in favor of SRI. Thus, SRI had no authority to make any encumbrance on the property of SBI. Also, it found that Navarez and Dimaculangan were not mortgagees-in-good-faith as they did not thoroughly verify the status of SRI and inquire further with the SEC as regards the alleged transfer of shares of stock. Dimaculangan merely relied on the representation of Villamor while Navarez dealt only with Dimaculangan relying on her prior successful dealings with him. HSCATc

According to the Court of Appeals, De Castro, Bautista, and Velez cannot feign ignorance regarding the transaction since they were identified as the "new" set of SBI officers and directors who dealt with Cadhit, an obscure broker known only to them. Deles and De Castro never disowned their signatures on the MOA and the REM yet, they, together with SRI and Villamayor, blamed Bautista and Velez for giving them ill-advise as their retained counsel.

The appellate court affirmed the ruling of the RTC granting Navarez's cross-claim against her co-defendants as well as its dismissal of all other cross-claims and third-party complaints. It likewise ruled that the RTC did not commit grave abuse of discretion in denying the motion for execution pending appeal filed by SBI and the Baens siblings since there was no basis to grant the same.

The liable parties then filed their respective Motions for Reconsideration which were denied by the Court of Appeals in a Resolution dated January 18, 2019.

Velez comes before this Court through a Petition for Review on Certiorari, docketed as G.R. Nos. 244182-83, while Special Administrator Apolonio Quesada, Jr. (Quesada), representing Navarez's estate, also filed a Petition for Review on Certiorari, docketed as G.R. No. 244237.

The Petitions had been consolidated by this Court.

The Court denies due course to the instant Petitions as they both failed to show that the Court of Appeals committed any reversible error in the assailed Decision and Resolution.

Essentially, Velez asks this Court to re-assess the evidence with regard to his involvement in the fraudulent transactions to the detriment of SBI while Special Administrator Quesada seeks a reversal of the findings that Navarez was a mortgagee-in-bad-faith and the REM in her favor was invalid, all of which were already extensively considered by both the RTC and the Court of Appeals. It should be noted that the RTC and the Court of Appeals had consistent findings regarding the willful participation of Velez in the transactions, specifically the preparation of the MOA and other documents relative to the REM, and the lack of good faith on the part of the defendants, including Navarez as one of the mortgagees of the subject property. Simply, the allegations and arguments of the petitioners involved factual issues the determination of which is beyond the ambit of this Court's power of review under Rule 45 of the Rules of Court. Only questions of law may be raised under this Rule as this Court is not a trier of facts. Moreover, where, as in this case, the Court of Appeals affirms the factual findings of the trial court, such findings generally become conclusive and binding upon this Court. While there are several recognized exceptions to this rule, none of these exceptions applies here. 5

Additionally, Special Administrator Quesada's Petition in G.R. No. 244237 lacks the statement on the material date of the filing of the motion for reconsideration before the Court of Appeals, as required under Section 4 (b), Rule 45 of the Rules of Court. The failure of Special Administrator Quesada to comply with such requirement is deemed sufficient ground in itself for the dismissal of his Petition. 6

The Court, however, modifies the appealed Decision as regards the interest rates on the monetary awards following the guidelines laid down by the Court in Nacar v. Gallery Frames, 7 to wit:

[I]n the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for loans or forbearance of any money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the case of Eastern Shipping Lines and Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 — but will now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable.

Corollarily, in the recent case of Advocates for Truth in Lending, Inc. and Eduardo B. Olaguer v. Bangko Sentral Monetary Board, this Court affirmed the authority of the BSP-MB to set interest rates and to issue and enforce Circulars when it ruled that "the BSP-MB may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the forbearance of any money, goods or credits, including those for loans of low priority such as consumer loans, as well as such loans made by pawnshops, finance companies and similar credit institutions. It even authorizes the BSP-MB to prescribe different maximum rate or rates for different types of borrowings, including deposits and deposit substitutes, or loans of financial intermediaries." IDTSEH

Nonetheless, with regard to those judgments that have become final and executory prior to July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.

To recapitulate and for future guidance, the guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:

I) When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.

II) With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

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 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein. (Citations omitted.)

Based on the foregoing, the amounts of PhP14,000,000.00 and PhP1,000,000.00 which SRI, Deles, Villamor, Villamayor, and De Castro are directed to reimburse to Navarez and Dimaculangan, respectively, shall be subject to interest at the rate of 12% per annum from the time of filing of the Complaint until June 30, 2013, and thereafter, 6% per annum from July 1, 2013 until finality of this judgment.

Furthermore, once the judgment in this case becomes final and executory, all monetary awards herein to SBI and the Baens siblings as well as to Navarez and Dimaculangan shall be subject to interest at the prevailing legal rate of 6% per annum from such finality until its satisfaction.

WHEREFORE, the Court hereby resolves as follows:

(a) To DENY the Petition for Review of Jose Mari S. Velez, Jr. in G.R. Nos. 244182-83 and the Petition for Review of Apolonio C. Quesada, Jr. in G.R. No. 244237 for failure to establish any reversible error by the Court of Appeals in its assailed Decision dated April 27, 2018 and Resolution dated January 18, 2019 in CA-G.R. CV No. 104539 and CA-G.R. SP No. 140938. The Petition of Apolonio C. Quesada, Jr. in G.R. No. 244237 further lacks statement of material date of filing of the motion for reconsideration before the Court of Appeals as required by Section 4 (b), Rule 45 of the Rules of Court, which is a ground for outright dismissal of the Petition under Section 5 of the same Rule;

(b) To AFFIRM WITH MODIFICATIONS the Decision dated April 27, 2018 of the Court of Appeals in CA-G.R. CV No. 104539 and CA-G.R. SP No. 140938, viz.: SICDAa

(i) The amounts of PhP14,000,000.00 and PhP1,000,000.00 which Saturn Resources, Inc., Emmanuel Deles, Mario Villamor, Emilio P. Villamayor, and Manuel N. De Castro are directed to reimburse to Avelina Navarez (deceased) and Leonardo Dimaculangan, respectively, shall be subject to interest at the rate of 12% per annum from the date of filing of the Complaint before the Regional Trial Court in Civil Case No. 01-100516 until June 30, 2013 and at the rate of 6% per annum from July 1, 2013 until the date of finality of this judgment; and

(ii) All monetary awards herein in favor of Santillan-Baens, Inc., Jose S. Baens, Hector S. Baens, Gloria Baens-Ramirez, and Aida Baens-Llacuna, as well as Avelina Navarez (deceased) and Leonardo Dimaculangan, shall be subject to interest at the rate of 6% per annum from the date of finality of this judgment until full satisfaction of the same; and

(c) To REQUIRE the parties or their counsel to indicate their contact details in their papers and pleadings to be filed with this Court pursuant to A.M. No. 07-6-5-SC (En Banc Resolution dated July 10, 2007).

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

 

Footnotes

1.Rollo (G.R. Nos. 244182-83), pp. 174-195; penned by Presiding Judge Virgilio V. Macaraig.

2.Id. at 195.

3.Id. at 28-59; penned by Associate Justice Jose C. Reyes, Jr. (now a member of this Court) with Associate Justices Franchito N. Diamante and Maria Elisa Sempio Diy concurring.

4.Id. at 59.

5.Heirs of Paz Macalalad v. Rural Bank of Pola, Inc., G.R. No. 200899, June 20, 2018.

6. RULES OF COURT, Rule 45, Section 5.

7. 716 Phil. 267, 280-283 (2013). See Bangko Sentral ng Pilipinas Monetary Board Circular No. 799, Series of 2013.