794 Phil. 526
LEONEN, J.:
This is a case for collection of sum of money with claims for damages, instituted by the heirs of Ireneo and Caridad Entapa, namely: Rosario Entapa-Oropeza [sic], Julianna E. Warn, Cerina G. Entapa, Winston G. Entapa represented . . . by his Spouse Ninfa Lamistoza-Entapa, Franklin G. Entapa, Marina E. Schacht and Elvira Entapa.The Philippine National Bank appealed to the Court of Appeals and argued that (1) the trial court's Decision violated the Constitution and the Rules of Civil Procedure when it failed to state the facts and law on which its ruling was based, and (2) the trial court erred in ordering it to return the payments.[35]
Ireneo Entapa, deceased, died on December 7, 1967 in the city of Bago, survived by his widow, Caridad Entapa and legitimate children herein before named. Ireneo Entapa was the registered owner of two parcels of lands located in Barangay Ilijan, City of Bago, denominated as Lot No. 2664 covered by TCT No. T- and Lot No. 2666 covered by TCT No. T-[sic]. The wife and widow, Caridad Entapa, now deceased was also a registered owner of Lot No. 2665, covered by TCT OCT No. R-6497.
When Ireneo Entapa died, the lands devolved upon his heirs, the surviving wife, Caridad Entapa, and their children.
During the lifetime of the wife, Caridad Entapa, together with the children: namely, Juliana E. Ham and Winston Entapa as heirs-owners of the aforementioned lots, executed a Special Power of Attorney in favor of Joseph Gonzaga, to mortgage the lot to banking institutions.
Joseph Gonzaga mortgaged the properties to the Philippine National Bank-Bacolod Branch.
The other children except the two who signed the Special Power of Attorney were working abroad and they were unaware of the execution of the Special Power of Attorney in favor of Joseph Gonzaga.
The loan was not paid by Joseph Gonzaga and the Philippine National Bank sold the lands in a public auction. The bid was awarded to the mortgagee-bank, the Philippine National Bank. A certificate of Sale issued to the Philippine National Bank marked in evidence as Exhibit [sic].
When the children heirs learned of the foreclosure of the properties while they were abroad, the heirs headed by Rosario Entapa Orpeza, made representation with the Philippine National Bank to purchase back the properties via restructuring of the loan under Republic Act No. 7202 otherwise known as the Sugar Restitution Law.
Pursuant to the Sugar Restitution Law, the Philippine National Bank through its Vice President[,] Mr. Topaciof,] accepted in principle the restructuring of the loan and for the heirs to purchase back the properties with 20% percent [sic] down payment of the recomputed value which amounted to Php 178,336.50. In addition, the heirs were also required to update the realty taxes of the lots. The heirs obliged by paying the realty taxes. The heirs through Rosario Entapa Orpeza paid the required deposit of Php 178,336.50. It was paid in German Currency converted to Philippine peso prevailing at the time. The heirs were happy that they could get back their ancestral lots where they grew up.
Rosario Entapa Orpeza who spearheaded the repurchase of the properties was based in the United States of America working as an accountant. She stayed in the country abandoning meanwhile her work in the USA just to consummate the repurchase of the properties and she lost income while staying in the Philippines.
When Rosario Entapa Orpeza had paid for the realty taxes and the 20% downpayment for the repurchase, she wanted to visit the lands located on the mountainside in Upper Maao, Bago City. She discovered that the properties are occupied by several families who are CARP beneficiaries and are holding CLOA[s] issued by the Department of Agrarian Reform.
She confronted the PNB official, Mr. Raul Topacio on the alleged CARP coverage of the lots but she was reassured that the PNB shall take care of it.
It was sometime on March 15, 1995 when Rosario Entapa Orpeza formally applied for restructuring under the Sugar Restitution Law. On May 22, 1995, the Assistant Vice President Raul G. Topacio informed Rosario Entapa Orpeza of the total obligations which required twenty (20%) percent down payment and the account shall be payable in[ ] 13 years.
The restructuring of the loan was officially approved by the Branch Committee on April 16, 1996.
Before approving the restructuring of the Entapa loan, the PNB verified if the properties have been turned over to the Department of Agrarian Reform as required by[ ] law on acquired agricultural assets of the bank. There was a list of properties transferred to the DAR (Exhibit 7) and the properties of Caridad Entapa were not in the list indicating that the subject properties have not been transferred for CARP coverage. The owner's duplicate of the title is still with the PNB.
Rosario Entapa Orpeza signed "ACCEPTANCE" in the May 1996 letter of the PNB on the terms of restructuring of the loan.
When the alleged CARP coverage was verified with the Department of Agrarian Reform, documents cropped up indicating that the lot was sold by the PNB to the Department of Agrarian Reform way back on September 30, 1989. The DAR sent a notice of Land Valuation (Exhibit 0) dated March 6, 1992. The Department of Agrarian Reform processed the awards of the land and CLOA[s] were issued and given to the beneficiaries.
From the evidence adduced, it appears that the Philippine National Bank was not meticulous in allowing the Entapa Heirs to avail of the Sugar Restitution Law to repurchase their property. The PNB agreed to grant the restitution because from the record they looked into, the Entapa property was not among those transferred to the Department of Agrarian Reform, actually the property had been offered to the DAR under the Voluntary Offer to Sell (VOS), and the valuation [had] been determined and communicated to the Philippine National Bank as shown by subsequent check of record.
The Certificate of Land Ownership Award (CLOA) have [sic] been issued and distributed to the awardees; thus, it became legally impossible to go on with the repurchase of the property by the Entapa Heirs under the Sugar Restitution Law or plain repurchase of the property.
With the situation that the Entapa Heirs could no longer work and hope to reacquire their property, the plaintiffs-heirs formally demanded for the return of the 20% initial deposit paid to the PNB and also the real property taxes paid when the property had already been divided and awarded to the beneficiaries covered by CLOA[s].
The Philippine National Bank did not return the amount paid by the Entapa Heirs which led to the filing of the instant case. Likewise, the Entapa Heirs suffered for the vain hope that they could get back the properties with so much attachment or sentimental value.
The repurchase had not materialized; thus, the demand to return the amounts paid.
In a nutshell, the Entapa Heirs, who were working abroad in the United States and Germany, came to know that the lot of the mother had been foreclosed and the redemption period had lapsed. The heirs wanted to recover the property and one option was to repurchase the property under the Sugar Restitution Law. The heirs were allowed in principle to repurchase the property under the Restitution Law. The Philippine National Bank was under the impression that the subject property still belonged to the PNB because the owner's duplicate of the title was still on file and a check on the list of properties transferred to the Department of Agrarian Reform, the Entapa property was not among them — the acquired agricultural lands shall be turned over to the DAR for purposes of the Land Reform program. The Philippine National Bank formally communicated to the Entapa Heirs of the approval of the repurchase and the valuation wherein the former owners were required initially the 20% of the valuation and the Entapa heirs did pay. The heirs were likewise required to update the real property taxes which they complied.
When the Entapa heirs came to know that the subject lot had been earlier offered to the Department of Agrarian Reform under the Voluntary Offer to Sell (VOS) scheme of the CARP, they were aghast and their hope to be able to get back the property came to naught. The PNB tried to reassure the heirs that the Certificate of Title is still in the name of the PNB and it would push through the repurchase under the Sugar Restitution Law.
With the granting of the CLOA[s] to the beneficiaries who had been in actual occupation and cultivation, there was no more possibility for the heirs to get back the land.
The Entapa heirs demanded for the return of the money they had paid for the value of the land and the real property taxes they paid, for they could not repurchase the land. The PNB refused to timely return the amounts paid by the heirs which finally led to the instant suit. Rosario Entapa Orpeza had to delay her return to her work to the United States of America in order to consummate the repurchase and getting back of the property. In the USA, she had a work which earned regularly for her in dollars. Rosario claims moral and actual damages for the failure to get back the property which has sentimental value to the children.
With the repurchase not carried, there is the duty to return the amounts paid by the Entapa heirs.
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant:SO ORDERED.[34]
- The defendant is ordered to return to the plaintiff the following amounts:
- Php 178,336.10 - representing initial downpayment for the repurchase of the lot plus legal interests until paid;
- Php 56,421.30 representing realty taxes paid on the lot plus legal interests until paid;
- Php 50,000.00 as exemplary damages;
- Php 50,000.00 as moral damages; and
- Attorney's fees of 15% of the amount due; and
- To pay the costs of suit.
WHEREFORE, in view of all the foregoing, the appeal is GRANTED. The assailed 31 August 2006 Decision of the Regional Trial Court Branch 54 of Bacolod City in Civil Case No. 98-10510 is NULLIFIED as it does not conform with Section 14 Article VII [sic] of the 1987 Constitution and Section 1 Rule 36 of the Rules of Court.The Philippine National Bank moved for reconsideration, but the Motion was denied in the Resolution dated October 2, 2014.[42]
The records of the case are hereby remanded to the said Regional Trial Court for the rendition of judgment in accordance with the mandate of the Constitution and the Rules of Court, with dispatch.
SO ORDERED.[41] (Emphasis in the original)
II. The Court of Appeals seriously erred when it held petitioner PNB liable to return the amount of Phpl78,336.10 representing initial downpayment of respondents plus legal interest effective 14 October 1998 until paid.In their Comment,[45] respondents argue that the Court of Appeals did not make any adjudication on the merits of the case since the dispositive portion of the Decision did not actually state that petitioner was liable to respondents for the stated amounts.[46] Respondents further assert that the Court of Appeals discussed the other issues because petitioner raised these issues before the Court of Appeals, and if petitioner did not want the Court of Appeals to discuss these issues, then it should not have raised them.[47] Respondents argue that even assuming that there was an adjudication on the merits, the Court of Appeals would not have erred in finding petitioner liable since its bad faith was clear from the facts and the evidence.[48]
III. The Court of Appeals seriously erred when it held petitioner PNB liable to return the amount of Php56,421.30 representing the realty taxes paid by respondents plus legal interest until paid.
. . . .
IV. The Court of Appeals seriously erred when it held the Bank liable to pay moral damages, exemplary damages, attorney's fees and cost of suit to respondents.[44]
Rule 36, Section 1 of the Rules of Court provides:ARTICLE VIII . . . .
Judicial Department
SECTION 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor.
The Court of Appeals, in nullifying the Decision of the trial court, stated that it "contained no reference to any legal basis in reaching its conclusions"[49] nor did it "cite any legal authority or principle to support its conclusion that [the] bank is liable."[50] The Court of Appeals found that the "trial court merely narrated the factual circumstances of the case and directly declared the liability of the [bank] to pay [respondents] the amount she paid as downpayment for the re-purchase of the subject land."[51]RULE 36
Judgments, Final Orders and Entry Thereof
SECTION 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court.
The Entapa heirs demanded for the return of the money they had paid for the value of the land and the real property taxes they paid, for they could not repurchase the land. The PNB refused to timely return the amounts paid by the heirs which finally led to the instant suit. Rosario Entapa Orpeza had to delay her return to her work to the United States of America in order to consummate the repurchase and getting back of the property. In the USA, she had a work which earned regularly for her in dollars. Rosario claims moral and actual damages for the failure to get back the property which has sentimental value to the children.The trial court failed to cite any legal basis for declaration of petitioner's liability. The Decision merely contained a recitation of facts and a dispositive portion. Yao v. Court of Appeals[54] nullified a similar decision for failure of the court to state the legal basis for its ruling:
With the repurchase not carried, there is the duty to return the amounts paid by the Entapa heirs.
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant:SO ORDERED.[53]
- The defendant is ordered to return to the plaintiff the following amounts:
- Php 178,336.10 — representing initial downpayment for the repurchase of the lot plus legal interests until paid;
- Php 56,421.30 representing realty taxes paid on the lot plus legal interests until paid;
- Php 50,000.00 as exemplary damages;
- Php 50,000.00 as moral damages; and
- Attorney's fees of 15% of the amount due; and
- To pay the costs of suit.
Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a paramount component of due process and fair play. It is likewise demanded by the due process clause of the Constitution. The parties to a litigation should be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to the higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is precisely prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. More than that, the requirement is an assurance to the parties that, in reaching judgment, the judge did so through the processes of legal reasoning. It is, thus, a safeguard against the impetuosity of the judge, preventing him from deciding ipse dixit. Vouchsafed neither. the sword nor the purse by the Constitution but nonetheless vested with the sovereign prerogative of passing judgment on the life, liberty or property of his fellowmen, the judge must ultimately depend on the power of reason for sustained public confidence in the justness of his decision.In Yao, the assailed decision was nullified and the records of the case were remanded to the trial court. The Court of Appeals in this case did the same.
Thus the Court has struck down as void, decisions of lower courts and even of the Court of Appeals whose careless disregard of the constitutional behest exposed their sometimes cavalier attitude not only to their magisterial responsibilities but likewise to their avowed fealty to the Constitution.[55] (Emphasis supplied, citations omitted)
While it is true that [petitioner] has the right to recover the deficiency of Gonzaga's loan obligation under the well-entrenched rule that a creditor is not precluded from recovering any unpaid balance on the principal obligation if the extrajudicial foreclosure sale of the property subject of the real estate mortgage results in a deficiency, still, such defenses could not be countenanced because it was belatedly raised only on appeal, not during the trial before the court a quo.Strangely, petitioner now comes before this Court and argues that the Court of Appeals should not have adjudicated on the arguments that it had raised before it.
Added to that, [petitioner] did not present any proof to substantiate its allegations. Their factual allegations clearly required the presentation of additional evidence in order to properly address the issues raised in the new theory. This, [petitioner] failed to do. Hence, this Court cannot give due course to the new issues raised in the appeal for lack of evidence. Justice and fair play dictate that [petitioner's] change of theory of their case on appeal be disallowed.[57] (Emphasis supplied)