January 2012 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
[G.R. No. 188152 : January 25, 2012]
ARTURO T. ESPEJO, SR. AND THE MEDICAL DEVICES INTERNATIONAL, REPRESENTED IN THIS INSTANCE BY DAUGHTER SHARRON E. MANZANO v. ANITA N. TY AND THE ALABANG MEDICAL CENTER CORPORATION
G.R. No. 188152 (Arturo T. Espejo, Sr. and the Medical Devices International, represented in this instance by daughter Sharron E. Manzano v. Anita N. Ty and the Alabang Medical Center Corporation). � This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Arturo T. Espejo, Sr. (Espejo), represented by his daughter Sharron E. Manzano, assailing the Court of Appeals (CA) Decision[1] dated June 30, 2008 and Resolution[2] dated June 1, 2009 in CA-G.R. CV No. 87226.
Petitioner Medical Devices International (MDI), represented herein by Espejo, is a foreign corporation dealing in brand-new and second-hand medical equipment. On the other hand, respondent Alabang Medical Center Corporation (AMCC) is a domestic corporation which operates the Alabang Medical Center (AMC). AMCC us represented herein by its President, Dr. Anita N. Ty (Ty).
On September 16, 1998, in time for AMC�s opening in 1999, AMCC entered into a Memorandum of Agreement[3] (MOA) with MDI through Espejo for the purchase of one Picker X-ray Room with fluoroscopic Controls and accessories for the amount of P1,600,000.00. Pursuant to the MOA, AMCC would issue twelve (12) postdated Metrobank checks in favor of MDI. Further, MDI obliged itself to deliver the equipment within thirty (3) days upon receipt of the down payment in the amount of P480,000.00
On even date, AMCC issued the 12 postdated Metrobank checks in favor of MDI including the check for the said down payment in the amount of P480,000.00. However, AMCC claimed that MDI failed to deliver the equipment on time as it arrived only in December 1998. Further, AMCC alleged that the equipment that was delivered was incomplete, not fully installed and not functional.
Thereupon, AMCC demanded for the return of the postdated checks that it issued. Instead of returning the postdated checks, MDI encashed four of the said checks in the total amount of P720,000.00, prompting AMCC to close its account with Metrobank. AMCC then demanded MDI to comply with their undertaking pursuant to the MOA, even as it promised to pay the latter the balance of the purchase price upon complete installation of the equipment. Despite repeated demands, AMCC claimed that MDI failed to comply with its undertaking.
On April 4, 2000, AMCC filed a complaint for annulment of negotiable instrument, specific performance and damages against MDI and Espejo with the Regional Trial Court (RTC) of Muntinlupa City.
For their part, MDI and Espejo averred that they had already completed the installation of the said equipment and that it was the respondents who did not comply with their undertaking. MDI and Espejo pointed out that the subsequent checks that were issued by the AMCC as payment for the equipment were dishonored by the drawee bank when the same were presented for payment.
On May 3, 2005, the RTC rendered a decision ordering the rescission of the MOA. Thus, the RTC ordered MDI and Espejo to: (1) return to AMCC the amount of P720,000.00 representing the total amount of the four checks that were encashed with interest at the rate of 12% per annum; (2) return to AMCC the rest of the postdated checks that were not encashed and declaring the same as cancelled and void for failure of consideration; and (3) pay AMCC the sum of P100,000.00 as actual damages, P100,000.00 as exemplary damages, P100,000.00 as attorney's fees and P50,000.00 as acceptance fee.
Likewise, AMCC and Ty were ordered to return the equipment and its accessories to MDI and Espejo. MDI and Espejo sought a reconsideration of the said decision but it was denied by the RTC in its Order dated October 5, 2005.
MDI and Espejo appealed the May 3, 2005 Decision of the RTC to the CA. On June 30, 2008, the CA rendered the herein assailed Decision[4] affirming the May 3, 2005 decision of the RTC albeit with modification.
The CA held that, since MDI and Espejo violated the terms of the MOA, the RTC correctly ordered the rescission of the same. Nevertheless, the CA deleted the awards for actual, moral and exemplary damages in favor of AMCC and Ty for lack of basis. Likewise, the CA reduced the amount of attorney's fees awarded to AMCC and TY to P30,000.00. The motion for reconsideration filed by MDI and Espejo was denied by the CA in its Resolution[5] dated June 1, 2009.
Undaunted, the petitioners instituted the instant petition for review on certiorari before this Court asserting that the CA and the RTC erred in ordering the rescission of the MOA. Further, they insist that they did not violate any of their undertaking under the MOA. They claimed that the said equipment could not be made operational since AMCC failed to provide a 112 KVA Building Transformer that would have supplied the equipment's required power of 480 to 510 volts.
After a careful consideration, the Court finds no reversible error in the decision of the CA.
It is a well-settled rule that in a petition for review under Rule 45, only questions of law may be raised by the parties and passed upon by this Court.[6] It is the burden of the party seeking review of a decision of the CA or other lower tribunals to distinctly set forth in his petition for review, not only the existence of questions of law fairly and logically arising therefrom, but also questions substantial enough to merit consideration, or show that there are special and important reasons warranting the review that he seeks.[7]
A question of law arises when there is doubt as to what the law is on a certain state of facts, while a question of fact exists when the doubt arises as to the truth or falsity of the alleged facts.[8]
One test to determine if there exists a question of fact or law in a given case is whether the Court can resolve the issue that was raised without having to review or evaluate the evidence, in which case, it is a question of law; otherwise, it will be a question of fact. Thus, the petition must not involve the calibration of the probative value of the evidence presented. In addition, the facts of the case must be undisputed, and the only issue that should be left for the Court to decide is whether or not the conclusion drawn by the CA from a certain set of facts was appropriate.[9]
Here, the petitioners' arguments in support of the instant petition are essentially anchored on the question of whether the lower courts erred in finding that they violated their undertaking under the MOA. Corollary to the foregoing, the petitioners insist that it was AMCC and Ty who reneged on their undertaking when they failed to make good the postdated checks which they issued as payment for the equipment they purchased.
However, a determination of the arguments raised by MDI and Espejo in the instant petition would inevitably necessitate a review of the probative value of the evidence adduced in the case below. Clearly, the instant petition does not raise a question of law.
In any case, a perusal of the allegations, issues and arguments set forth by the petitioner would readily show that the CA did not commit any reversible error so as to warrant the exercise of the Court's appellate jurisdiction.
Contracts are law between the parties, and they are bound by its stipulations. Settled is the rule that rescission or, more accurately, resolution, of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith by the other party that violates the reciprocity between them.[10]
The breach contemplated in the said provision is the obligor's failure to comply with an existing obligation. When the obligor cannot comply with what is incumbent upon it, the oblige may seek rescission and, in the absence of any just cause for the court to determine the period of compliance, the court shall decree the rescission.[11] Here, the respondents validly exercised their right to rescind the MOA on account of the failure of the petitioners to comply with their undertaking under the said agreement.
Anent the petitioners' contention that they could not make the equipment operational on account of the respondents' failure to provide 112 KVA Building Transformer which would have supplied the needed electricity for the equipment, we find the same untenable. This Court notes that the foregoing issue is being raised by MDI and Espejo for the first time in the instant petition.
It is well-settled that no question will be entertained on appeal unless it has been raised in the proceedings below. Points of law, theories, issues and arguments not brought to the attention of the lower court, administrative agency or quasi-judicial body, need not be considered by a reviewing court, as they cannot be raised for the first time at that late stage. Basic considerations of fairness and due process impel this rule. Any issue raised for the first time on appeal is barred by estoppel.[12]
WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. Brion, J., on official leave; Perlas-Bernabe, designated additional member per S.O. No. 1174.
SO ORDERED.
Very truly yours,
(Sgd.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court
Endnotes:
[1] Penned by Associate Justice Monina Arevalo-Zenarosa, with Associate Justices Edgardo F. Sundiam and Sixto C. Marella, Jr., concurring; rollo, pp. 28-38.[2] Id. at 59-60.
[3] Id. at 25-26.
[4] Supra note 1.
[5] Supra note 2.
[6] Republic of the Philippines v. De Guzman, G.R. No. 175021, June 15, 2011.
[7] Sps. Pengson v. Ocampo, Jr., 412 Phil. 860, 865-866 (2001).
[8] Sime Darby Pilipinas, Inc. v. Goodyear Philippines, Inc., G.R. Nos. 182148 and 183210, June 8, 2011.
[9] Hko Ah Pao v. Ting, G.R. No. 153476, September 27, 2006, 503 SCRA 551, 559. (citation omitted)
[10] Spouse Cannu v. Spouse Galang, 498 Phil 128, 140 (2005). (citations omitted)
[11] Sps. Velarde v. Court of Appeals, 413 Phil. 360, 373 (2001). (citation omitted)
[12] Besana v. Mayor, G.R. No. 153837, July 21, 2010, 625 SCRA 203, 214. (citation omitted)
