FIRST DIVISION
G.R. No. 180060, July 13, 2016
SPOUSES AUGUSTO AND NORA NAVARRO, Petitioners, v. RURAL BANK OF TARLAC, INC., Respondent.
D E C I S I O N
SERENO, C.J.:
The case before this Court concerns the availability of the remedy of an ordinary appeal under Rule 41 of the Rules of Court1 in challenging the decision of the Regional Trial Court (RTC)2 to resolve a case by way of a summary judgment. The Court of Appeals (CA) dismissed3 the appeal outright in light of Section 2, Rule 50 of the Rules of Court. The provision directs the dismissal of appeals filed through Rule 41 if they merely raise pure questions of law. Spouses Augusto and Nora Navarro now come before this Court arguing that their appeal should not have been dismissed, since the issues they raised included questions of fact.
Defendants claimed they had paid the sum of P161,137.69 as of March 18, 2002, and had in fact surrendered one Kia Van by way of "dacion en pago" thereby extinguishing the obligation.Petitioners assailed the trial court's Decision by filing an ordinary appeal under Rule 41 of the Rules of Court20 and assigning the following errors:21
If the intention of parties is to consider the surrender of the Kia Van as full payment, a receipt to that effect should have been signed or acknowledged by the bank. There was none. Further, it is the burden of defendants to prove that their payments to the bank amounted to P161,137.69 as of March 18, 2002, which should be evidenced by receipts of payment to the bank.
Thus, the Court finds that the motion for summary judgment is proper. The Court agrees that the obligation of the defendants or the principal balance is P315,677.80. However, the interest of 32% per annum, the 12% penalty and 12% liquidated damages, all totaling 56% plus 25% attorney's fees may be [unconscionable], as the charges amounted to 81% of the principal balance. The Court has to [reduce] this x x x. The legal rate of 12% per annum should be applied in this case, which should be computed from December 7, 2002 on the balance of the principal amount which was P315,677.80. The computation should be -
P315,677.80 x 1% (per month) x eight months from December 2002 up to July, 2003
= total interest due or P25,244.16
Thus, the total amount to be paid is computed in this manner ---Plaintiff is entitled to a reasonable sum of P5,000.00 as attorney's fees, there being a stipulation in the contract.
Plus P 315,677.80 25,244.16 P 340,921.96
Spouses Navarro claimed22 that a factual controversy still existed concerning their remaining indebtedness. They maintained that the conveyance of their motor vehicle already served to offset the claims of the bank by means of dacion en pago. In any event, they averred that it could have simply made a deficiency claim against them if the amount derived from the sale of the vehicle was found insufficient. Consequently, they insisted that the RTC should not have granted the bank's Motion for Summary Judgment, since there was still a need to hold a trial to ascertain the amount of the unpaid balance. With regard to the last issue, petitioners argued that the RTC erred in ordering them to pay attorney's fees and costs of suit. They pointed out that there was no basis for the grant, since there was no trial.
- The lower court erred in finding that summary judgment is proper.
- The lower court erred in rendering summary judgment when there existed genuine triable issues.
- The lower court erred in not conducting a hearing to find out that defendant's obligation had already been extinguished.
- The lower court erred in awarding to plaintiff attorney's fees and costs.
SECTION 2. Dismissal of improper appeal to the Court of Appeals. — An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be dismissed.There is a question of law when the issue does not call for an examination of the probative value of the evidence presented or an evaluation of the truth or falsity of the facts admitted.26 Here, the doubt revolves around the correct application of law and jurisprudence on a certain set of facts or circumstances.27 The test for ascertaining whether a question is one of law is to determine if the appellate court can resolve the issues without reviewing or evaluating the evidence.28 Where there is no dispute as to the facts, the question of whether or not the conclusions drawn from these facts are correct is considered a question of law.29 Conversely, there is a question of fact when doubt or controversy arises as to the truth or falsity of the alleged information or facts; the credibility of the witnesses; or the relevance of surrounding circumstances and their relationship to each other.30chanrobleslaw
An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright. (Emphases supplied)
An examination of the pleadings, documents and affidavits on file immediately reveal that there is controversy as to the claim of the plaintiff that the defendants are still indebted to it for the sum of P315,677.80, plus interests, penalty charge, liquidated damages and attorney's fees when the obligation has already been fully extinguished with a Dacion En Pago over a motor vehicle conveyed to the plaintiff. And even assuming, but without admitting that defendant still owed the plaintiff, the same would just be one for deficiency claim with the total payments made and actual value of the motor vehicle conveyed set off against total bank claims, so that, in such case, an accounting is first needed to establish the correct balances thereon and the lack or absence thereof necessarily renders plaintiffs action premature. These contentious issues necessarily entail the presentation of evidence.Clearly, these matters do not entail a review of the facts or an evaluation of the probative value of the evidence. The CA was only required to examine if the admitted facts in the pleadings and the affidavits filed by the movant warranted the trial court's conclusions on the applicable law. The only factual issue petitioners attempted to tender was the claim that they paid more than what the bank claimed as total monthly installments. But even on this point, they failed to introduce any acceptable evidentiary reference.
Moreover, the Answer specifically denied the material allegations of the complaint on defendants' default, refusal to pay their obligation that included interest, penalty charges, liquidated damages and attorney's fees.
The only way to ascertain the truth is obviously through the presentation of evidence by the parties. Summary judgment is not proper where the defendant presented defenses tendering factual issues which call for the presentation of evidence as where the defendant specifically denied the material allegations in the complaint.
Thus, there are issues of facts pleaded and disputed rendering the case unripe for a summary judgment. The Honorable Court should try the case on the merits. Until such time as the trial on the merits of the case is done, it would be PREMATURE on the part of the Court to render judgment on the case without 1 earing the parties on the merits of their respective sides.
The lower court said in its decision that "if the intention of the parties is to consider the surrender of the Kia Van as full payment, a receipt to that effect should have been signed or acknowledged by the bank. There was none." It must be noted that the Answer alleges "bad faith" and abuse of rights against the plaintiff ["in filing this case for collection when defendants' obligation with it had already been extinguished"50]. It should hear and try the case because by the testimony and other evidences to be presented, the court would be informed of the reason why there was no such receipt and why the entire obligation has already been extinguished.
Defendant Augusto Navarro declared in his Affidavit that they "were compelled to surrender the financed Kia Van upon an agreement forged with us by the bank that the surrender of said vehicle (will) fully pay and extinguish our obligation"; that "in consideration of our said agreement, the bank made us to sign IN BLANK a deed of sale over the same motor vehicle to leave to the bank full authority and control to dictate the price thereof; which price, were made to believe and understand, will apply to the full payment and extinguishment of our said obligation".
To support this claim of defendant Augusto Navarro is plaintiffs own exhibit which appears to be the "Deed of Sale" mentioned by said defendant.
Now, would the court be truly justified in rendering a summary judgment when by the appearance of what is before it, it is bound by the dictates of justice and fair play to look into the transaction so it could inform itself as to who among the plaintiff and the defendants are telling the truth? From where we stand, it is very clear that, contrary to the finding of the lower court, the rendition of a summary judgment in this case is not proper. There should be a trial to ferret out the truth.
Besides the lower court itself stated that "it is the burden of defendants to prove that their payments to the bank amounted to P161,137.69 as of March 18, 2002, which would be evidenced by receipts of payments to the bank". Verily, if one party has the burden of proof, necessarily he is under obligation to present such proof. So how can one present the proof required of him when he is denied the opportunity to present the same? In effect, such denial is a negation of one's right to be heard and to due process. Under our Constitution, no person shall be deprived of life, liberty or property without due process of law.
From the circumstances availing, there is really a very serious doubt as to the propriety of the summary judgment. In case of such doubt, the doubt shall be resolved against the moving party. The court should take that view of evidence most favorable to the party against whom it is directed and give that party the benefit of all favorable inferences. (Citations omitted, emphases supplied)
Endnotes:
1 Petition for Review on Certiorari, pp. 9-10, rollo, pp. 16-17.
2 The Tarlac City (Br. 63) Regional Trial Court Decision in Civil Case No. 9381 was penned by Judge Arsenio P. Adriano. RTC Decision, CA rollo, pp. 19-21.
3 The Court of Appeals Decision dated 27 December 2006 and Resolution dated 03 October 2007 in CA- G.R. CV No. 80041 were penned by Associate Justice Mariflor P. Punzalan Castillo and concurred in by Associate Justices Andres B. Reyes, Jr. and Hakim S. Abdulwahid. See CA Decision, rollo, pp. 20-31; CA Resolution, rollo, pp. 32-33.
4See Petition for Review on Certiorari, pp. 2-3, rollo, pp. 9-10; Appellants' Brief, p. 2, CA rollo, p. 11; Answer with Counterclaim of Spouses Navarro, RTC Records, pp. 17-19; Motion for Summary Judgment of Rural Bank of Tarlac, RTC Records, pp. 20-27.
5 Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, pp. 20-27. According to the bank, petitioners' obligation would amount to P494,707.66 if interests, penalties, and liquidated damages are computed.
6 Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, pp. 20-27. See RTC Decision, p. 1; CA rollo, p. 19.
7 Id.
8 Id.
9 Answer with Counterclaim of Spouses Navarro, RTC records, pp. 17-19.
10 Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, pp. 20-27.
11 Annex "A" of the Complaint of Rural Bank of Tarlac, RTC records, p. 4.
12 Receipts, Annexes "B" and "B-1" attached to the Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, p. 25.
13 Motion for Summary Judgment of Rural Bank of Tarlac, RTC Records, pp. 20-27. See RTC Decision, p. 1, CA rollo, p. 19.
14 Annex "C" of the Motion for Summary Judgment of Rural Bank of Tarlac, RTC Records, p. 26.
15 Comment/Opposition to Plaintiffs Motion for Summary Judgment, RTC Records, pp. 31-34.
16 Receipt dated 20 May 2002, Annex "1" of Spouses Navarro's Comment/Opposition to Plaintiffs Motion for Summary Judgment, RTC Records, p. 34.
17 The Decision dated 03 July 2003 issued by the Tarlac City Regional Trial Court (Br. 63) in Civil Case No. 9381 was penned by Judge Arsenio P. Adriano. CA rollo, pp. 19-21.
18 CA Decision, pp. 3-4, rollo, pp. 22-23.
19 RTC Decision, CA rollo, pp. 19-21.
20See Motion for Reconsideration of Petitioner before the CA, CA rollo, pp. 59-63.
21 CA Decision, p. 5, rollo, p. 24; Appellants' Brief, p. 1, CA rollo, p. 10.
22 Appellants' Brief, CA rollo, pp. 7-17.
23Rollo, pp. 24-25.
24 Reply to Comment, pp. 1-2, rollo, pp. 52-53.
25cralawred See Heirs ofCabigas v. Limbaco, 670 Phil. 274 (2011).
26Heirs of Cabigas v. Limbaco, 670 Phil. 274 (2011); St. Mary of the Woods School. Inc. v. Office of the Registiy of Deeds of Makati City, 596 Phil. 778 (2009); National Power Corporation v. Purefoods Corporation, 586 Phil. 587 (2008); First Bancorp, Inc. v. Court of Appeals, 525 Phil. 309 (2006); China Road and Bridge Corporation v. Court of Appeals, 401 Phil. 590 (2000).
27Bases Conversion Development Authority v. Reyes, G.R. No. 194247, 19 June 2013, 699 SCRA 217.
28 Id.; Rivera v. United Laboratories, Inc., 604 Phil. 184 (2009); Central Bank of the Philippines v. Castro, 514 Phil. 425 (2005); Cucueco v. Court of Appeals, 484 Phil. 254, 265 (2004); China Road and Bridge Corporation v. Court of Appeals, supra note 26.
29Bases Conversion Development Authority v. Reyes, supra; Cucueco v. Court of Appeals, 484 Phil. 254 (2004).
30Bases Conversion Development Authority v. Reyes, supra; Heirs of Nicolas S. Cabigas v. Limbaco, supra note 26; St. Mary of the Woods School, Inc. v. Office of the Registry of Deeds of Makati City, supra note 26; National Power Corporation v. Purefoods Corporation, supra note 26; First Bancorp, Inc. v. Court of Appeals, supra note 26; China Road and Bridge Corporation v. Court of Appeals, supra note 26.
31 Appellants' Brief, CA rollo, pp. 7-17.
32 RTC Records, pp. 17-19.
33 Id. at 31-32.
34 Petition for Review on Certiorari, rollo, pp. 8-19.
35 Answer with Counterclaim of Spouses Navarro, RTC Records, p. 17.
36 Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, pp. 20-27. See RTC Decision, p. 1; CA rollo, p. 19.
37 Receipt dated 20 May 2002, Annex "1" of Spouses Navarro's Comment/Opposition to Plaintiffs Motion for Summary Judgment, RTC Records, p. 34.
38 Receipts, Annexes "B" and "B-1" attached to the Motion for Summary Judgment of Rural Bank of Tarlac, RTC records, p. 25.
39 According to this provision, "An affirmative defense is an allegation of a new matter which, while hypothetically admitting the material allegations in the pleading of the claimant, would nevertheless prevent or bar recovery by him. The affirmative defenses include fraud, statute of limitations, release, payment, illegality, statute of frauds, estoppel, former recovery, discharge in bankruptcy, and any other matter by way of confession and avoidance."
40Phil. Commercial International Bank v. Franco, G.R. No. 180069, 5 March 2014; Bank of the Philippine Islands v. Spouses Royeca, 581 Phil. 188 (2008); Jimenez v. National Labor Relations Commission, 326 Phil. 89 (1996).
41 RTC Records, pp. 17-19.
42 RTC Records, pp. 31-34.
43 Appellants' Brief, CA rollo, pp. 7-17.
44 Appellants' Motion for Reconsideration, CA rollo, pp. 59-63.
45 Petition for Review on Certiorari, rollo, pp. 8-19.
46 Reply to Comment, rollo, pp. 52-55.
47 Memorandum, rollo, pp. 62-72.
48 Spouses Navarro's Comment/Opposition to Plaintiffs Motion for Summary Judgment, RTC Records, p. 32.
49 Appellants' Brief, CA rollo, pp. 13-15.
50 Answer with Counterclaim of Spouses Navarro, RTC Records, p. 18.
51 RTC Decision, p. 3, CA rollo, p. 21; Promissory Note, Annex "A" of Complaint, RTC Records, p. 8. See CIVIL CODE, Art. 2208.
52See also: Star Electric Corp. v. R & G Construction Development and Trading, Inc., G.R. No. 212058, 07 December 2015; Mendoza v. Spouses Gomez, G.R. No. 160110, 18 June 2014, 726 SCRA 505; F.F. Cruz & Co., Inc. v. HR Construction Corp., 684 Phil. 330 (2012); Land Bank of the Phils. v. Rivera, 649 Phil. 575 (2010).
53Heirs of Nicolas S. Cabigas v. Limbaco, supra note 26; St. Mary of the Woods School, Inc. v. Office of the Registry of Deeds of Makati City, supra note 26; National Power Corporation v. Purefoods Corporation, supra note 26, First Bancorp, Inc. v. Court of Appeals, supra note 26; China Road and Bridge Corporation v. Court of Appeals, supra note 26; Philippine National Bank v. Romillo, 223 Phil. 533 (1985).