October 2007 - Philippine Supreme Court Resolutions
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[G.R. No. 147147 : October 10, 2007] REYNALDO C. BANGAYAN, PETITIONER VERSUS THE COURT OF APPEALS, ASIANBANK CORPORATION, PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, THE REGISTER OF DEEDS OF MANILA AND SUSANA BANGAYAN, RESPONDENTS. :
[G.R. No. 147147 : October 10, 2007]
REYNALDO C. BANGAYAN, PETITIONER VERSUS THE COURT OF APPEALS, ASIANBANK CORPORATION, PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, THE REGISTER OF DEEDS OF MANILA AND SUSANA BANGAYAN, RESPONDENTS.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 10 October 2007:
G.R. No. 147147 - REYNALDO C. BANGAYAN, petitioner versus THE COURT OF APPEALS, ASIANBANK CORPORATION, PHILIPPINE COMMERCIAL and INDUSTRIAL BANK, THE REGISTER OF DEEDS OF MANILA AND SUSANA* BANGAYAN, respondents.
Before us is an appeal from the Decision[1] dated December 1, 2000 and the Resolution[2] dated February 16, 2001 of the Court of Appeals in CA-G.R. CV No. 61580 dismissing the appeal filed by petitioner Reynaldo C. Bangayan from the Decision[3] dated July 31, 1998 of the Regional Trial Court (RTC), Branch 14, Manila, in Civil Case No. 96-80151. The RTC had dismissed the complaint for cancellation of mortgage with damages, filed by petitioner Reynaldo C. Bangayan against respondents AsianBank Corporation (AsianBank), Philippine Commercial and Industrial Bank (PCIB), the Register of Deeds of Manila, and Susana Bangayan.
The facts, culled from the records, are as follows:
On September 24, 1996, Reynaldo C. Bangayan filed a complaint[4] for cancellation of mortgage with damages before the RTC, Manila, Branch 14, against respondents AsianBank, PCIB, and the Register of Deeds of Manila. In his complaint, Reynaldo alleged that he is the owner of a parcel of land consisting of 144 square meters, located at Tayuman corner Kilusang Loob Street, Sta. Cruz, Manila. The land is covered by Transfer Certificate of Title (TCT) No. 182863. Reynaldo further alleged that PCIB, in bad faith and with the use of forged documents, registered with the Register of Deeds of Manila, and caused the annotation on TCT No. 182863, of a mortgage in its favor for the sum of P2,300,000. Reynaldo also charged that AsianBank, in bad faith, and with the use of forged documents illegally registered with the Register of Deeds of Manila, and caused the annotation on TCT No. 182863, of a mortgage in its favor for the sum of P2J750,000.[5] He prayed that the mortgages be declared null and void, and for the Register of Deeds of Manila to cancel the annotations.
PCIB and AsianBank filed separate motions to dismiss. PCIB argued that Reynaldo had no cause of action against it since the annotation in PCIB's favor had already been cancelled on September 5, 1996.[6] AsianBank argued that Reynaldo failed to implead an indispensable party, his wife, Susana Bangayan.[7]
The RTC in Orders[8] dated November 13, 1996 and January 8, 1997, denied the motions to dismiss and directed Reynaldo to implead Susana as respondent.
During trial, Susana testified that sometime prior to November, 1988, she bought the parcel of land covered by TCT No. 182863 to build a building on the lot. Since her husband, Reynaldo, was confined at the Drug Rehabilitation Center in Bicutan, Taguig, Metro Manila for drug addiction, and after consulting him, Reynaldo told her to take care of the matter herself. Susana applied for a loan with PCIB and presented a Special Power of Attorney (SPA), allegedly signed by Reynaldo, authorizing her to apply for the loan. She got a loan of P2,300,000, with PCIB, using TCT No. 182863 as collateral. In 1996, the loan was assigned to Asianbank. The building was constructed and upon Reynaldo's release from the rehabilitation center, he and his family stayed in the building from October 1994 until October 1995, when he was again confined at the drug-rehabilitation center. When he was released in 1996, however, he did not live with his wife but instead stayed with his mother.[9]
Meanwhile, Susana filed a petition dated August 26, 1996, for declaration of nullity of their marriage.[10]
In this proceeding, Reynaldo testified that in 1993 while he was at the Drug Rehabilitation Center, Susana took charge of all family matters, their properties, and income from their store. After his release on October 19, 1995, he lived with his mother until October 1996. He said he knew nothing of the loan obtained by his wife from respondent banks. He also testified that he paid P15,000 to PCIB as partial payment of the loan.[11]
On July 31, 1998, the RTC rendered a decision dismissing the complaint. The RTC ruled that Reynaldo had effectively acquiesced and ratified the loans. The dispositive portion of the decision states:
Reynaldo, in his Memorandum,[15] argues that the Court of Appeals erred in ruling that he is estopped from questioning the validity of the SPA used in the mortgage as well as the other mortgage documents. He argues that all the loan transactions were done when he was confined at the drug rehabilitation center and was thus, mentally incapable of giving his wife authority to act on his behalf. He argues that the banks were also perpetrators of fraud. He avers that he never went to the banks, nor signed any document within the banks' premises, yet, all the banks documents, were allegedly signed by him in the presence of the banks' officials. He argues that with respect to PCIB, the latter should have exercised prudence when it relied entirely on the purported SPA.
AsianBank, in its Memorandum,[16] counters that the grounds relied upon by petitioner relates to questions of facts which have been previously ruled upon by the Court of Appeals and the RTC. It avers that PCIB had no way of knowing that petitioner's signature in the SPA was forged because the SPA was duly notarized. It further contends that petitioner's insistence that he never inquired where his wife got the money to construct the multi-million peso building, because he was under the impression that the money came from the income of their store, is unbelievable. Finally, it brands as constitutive of estoppel petitioner's acts of living with his family on the fourth floor of the building, constructed out of the proceeds of the loan where the subject property was used as collateral, and of partially paying the loan with PCIB even before AsianBank took over the mortgage of the property.
PCIB, in its Memorandum,[17] argues that petitioner has not shown that the Court of Appeals committed a reversible error in affirming the decision of the lower court. Petitioner knew and even ratified the loan of his wife with PCIB. Petitioner did not present clear and convincing evidence that his signature in the SPA was a forgery. Petitioner made partial payment of the loan and ratified the same. Moreover, according to PCIB, petitioner was guilty of laches. And the loan redounded to the benefit of the conjugal property for which the conjugal partnership is liable.
Pertinent in this regard are Article 1431 of the Civil Code and Section 2(a) of Rule 131 of the Rules of Court. Article 1431 provides:
As held by the Court of Appeals:
As for petitioner's claim for exemplary damages, it is a requisite for the grant of exemplary damages that the act of the offender must be accompanied by bad faith or done in a wanton, fraudulent or malevolent manner.[21] In this case, there is no proof that respondents acted in a wanton, fraudulent or malevolent manner. Hence, there appears to be no basis for an award of exemplary damages.
As to the attorney's fees awarded to the banks, the general rule is that attorney's fees cannot be recovered as part of damages because no premium should be placed on the right to litigate. In short, attorney's fees as part of damages is the exception rather than the rule. Counsel's fees are not awarded every time a party prevails in a suit. It can be awarded only in the cases enumerated in Article 2208[22] of the Civil Code, and in all cases it must be reasonable, just, and equitable. While we respect the trial court's exercise of its discretion in this case, we find the award to each respondent bank of P50,000 attorney's fees excessive. Hence the fees should be reduced to P10,000[23] only for each respondent bank.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated December 1, 2000 and the Resolution dated February 16, 2001 of the Court of Appeals in CA-G.R. CV No. 61580 are AFFIRMED with the MODIFICATION that the attorney's fees awarded to each of the two respondent banks is reduced to P10,000 only. No pronouncement as to costs.
SO ORDERED.
G.R. No. 147147 - REYNALDO C. BANGAYAN, petitioner versus THE COURT OF APPEALS, ASIANBANK CORPORATION, PHILIPPINE COMMERCIAL and INDUSTRIAL BANK, THE REGISTER OF DEEDS OF MANILA AND SUSANA* BANGAYAN, respondents.
Before us is an appeal from the Decision[1] dated December 1, 2000 and the Resolution[2] dated February 16, 2001 of the Court of Appeals in CA-G.R. CV No. 61580 dismissing the appeal filed by petitioner Reynaldo C. Bangayan from the Decision[3] dated July 31, 1998 of the Regional Trial Court (RTC), Branch 14, Manila, in Civil Case No. 96-80151. The RTC had dismissed the complaint for cancellation of mortgage with damages, filed by petitioner Reynaldo C. Bangayan against respondents AsianBank Corporation (AsianBank), Philippine Commercial and Industrial Bank (PCIB), the Register of Deeds of Manila, and Susana Bangayan.
The facts, culled from the records, are as follows:
On September 24, 1996, Reynaldo C. Bangayan filed a complaint[4] for cancellation of mortgage with damages before the RTC, Manila, Branch 14, against respondents AsianBank, PCIB, and the Register of Deeds of Manila. In his complaint, Reynaldo alleged that he is the owner of a parcel of land consisting of 144 square meters, located at Tayuman corner Kilusang Loob Street, Sta. Cruz, Manila. The land is covered by Transfer Certificate of Title (TCT) No. 182863. Reynaldo further alleged that PCIB, in bad faith and with the use of forged documents, registered with the Register of Deeds of Manila, and caused the annotation on TCT No. 182863, of a mortgage in its favor for the sum of P2,300,000. Reynaldo also charged that AsianBank, in bad faith, and with the use of forged documents illegally registered with the Register of Deeds of Manila, and caused the annotation on TCT No. 182863, of a mortgage in its favor for the sum of P2J750,000.[5] He prayed that the mortgages be declared null and void, and for the Register of Deeds of Manila to cancel the annotations.
PCIB and AsianBank filed separate motions to dismiss. PCIB argued that Reynaldo had no cause of action against it since the annotation in PCIB's favor had already been cancelled on September 5, 1996.[6] AsianBank argued that Reynaldo failed to implead an indispensable party, his wife, Susana Bangayan.[7]
The RTC in Orders[8] dated November 13, 1996 and January 8, 1997, denied the motions to dismiss and directed Reynaldo to implead Susana as respondent.
During trial, Susana testified that sometime prior to November, 1988, she bought the parcel of land covered by TCT No. 182863 to build a building on the lot. Since her husband, Reynaldo, was confined at the Drug Rehabilitation Center in Bicutan, Taguig, Metro Manila for drug addiction, and after consulting him, Reynaldo told her to take care of the matter herself. Susana applied for a loan with PCIB and presented a Special Power of Attorney (SPA), allegedly signed by Reynaldo, authorizing her to apply for the loan. She got a loan of P2,300,000, with PCIB, using TCT No. 182863 as collateral. In 1996, the loan was assigned to Asianbank. The building was constructed and upon Reynaldo's release from the rehabilitation center, he and his family stayed in the building from October 1994 until October 1995, when he was again confined at the drug-rehabilitation center. When he was released in 1996, however, he did not live with his wife but instead stayed with his mother.[9]
Meanwhile, Susana filed a petition dated August 26, 1996, for declaration of nullity of their marriage.[10]
In this proceeding, Reynaldo testified that in 1993 while he was at the Drug Rehabilitation Center, Susana took charge of all family matters, their properties, and income from their store. After his release on October 19, 1995, he lived with his mother until October 1996. He said he knew nothing of the loan obtained by his wife from respondent banks. He also testified that he paid P15,000 to PCIB as partial payment of the loan.[11]
On July 31, 1998, the RTC rendered a decision dismissing the complaint. The RTC ruled that Reynaldo had effectively acquiesced and ratified the loans. The dispositive portion of the decision states:
WHEREFORE, and in view of the foregoing considerations, judgment is hereby rendered dismissing the complaint.The Court of Appeals, in a Decision dated December 1, 2000, affirmed in toto the RTC ruling. It ruled that Reynaldo is estopped from questioning the validity of the loans secured by his wife, Susana. The dispositive portion of the decision states:
On the counterclaim of PCI Bank, ordering the plaintiff to pay defendant PCI Bank the amount of P50,000.00 as attorney's fees and to pay the costs; in the counterclaim of defendant AsianBank, ordering the plaintiff to pay to the defendant AsianBank the amount of P50,000.00 as attorney's fees and to pay the costs.
SO ORDERED.[12]
WHEREFORE, judgment is hereby rendered DISMISSING the appeal and AFFIRMIMG IN ALL RESPECT[S] the decision of the court a quo.[13]In sum, the main issue is whether or not estoppel bars Reynaldo from questioning the legality of the loan documents and mortgage of his property.
Hence, the instant petition.
Petitioner raises the following issues for our resolution:I.
WHETHER OR NOT THE ALLEGED VERBAL AUTHORITY OF PETITIONER'S ESTRANGED WIFE TO MORTGAGE THE CONJUGAL PROPERTY TO RESPONDENT PCI BANC IS VALID;II.
WHETHER OR NOT DESPITE THE FORGERIES OF HIS SIGNATURE ON ALL THE LOAN DOCUMENTS CONSTITUTING THE MORTGAGE OF SAID PROPERTY TO ASIANBANK, ESTOPPEL HAD SET IN TO BAR PETITIONER FROM QUESTIONING ITS LEGALITY[;]III.
WHETHER OR NOT PETITIONER IS ENTITLED TO THE DAMAGES HE PRAYED FOR BY REASON OF THE RESPONDENTS' PARTICIPATION IN THE COMMISSION OF THE FORGERIES AFORESAID.[14]
Reynaldo, in his Memorandum,[15] argues that the Court of Appeals erred in ruling that he is estopped from questioning the validity of the SPA used in the mortgage as well as the other mortgage documents. He argues that all the loan transactions were done when he was confined at the drug rehabilitation center and was thus, mentally incapable of giving his wife authority to act on his behalf. He argues that the banks were also perpetrators of fraud. He avers that he never went to the banks, nor signed any document within the banks' premises, yet, all the banks documents, were allegedly signed by him in the presence of the banks' officials. He argues that with respect to PCIB, the latter should have exercised prudence when it relied entirely on the purported SPA.
AsianBank, in its Memorandum,[16] counters that the grounds relied upon by petitioner relates to questions of facts which have been previously ruled upon by the Court of Appeals and the RTC. It avers that PCIB had no way of knowing that petitioner's signature in the SPA was forged because the SPA was duly notarized. It further contends that petitioner's insistence that he never inquired where his wife got the money to construct the multi-million peso building, because he was under the impression that the money came from the income of their store, is unbelievable. Finally, it brands as constitutive of estoppel petitioner's acts of living with his family on the fourth floor of the building, constructed out of the proceeds of the loan where the subject property was used as collateral, and of partially paying the loan with PCIB even before AsianBank took over the mortgage of the property.
PCIB, in its Memorandum,[17] argues that petitioner has not shown that the Court of Appeals committed a reversible error in affirming the decision of the lower court. Petitioner knew and even ratified the loan of his wife with PCIB. Petitioner did not present clear and convincing evidence that his signature in the SPA was a forgery. Petitioner made partial payment of the loan and ratified the same. Moreover, according to PCIB, petitioner was guilty of laches. And the loan redounded to the benefit of the conjugal property for which the conjugal partnership is liable.
Pertinent in this regard are Article 1431 of the Civil Code and Section 2(a) of Rule 131 of the Rules of Court. Article 1431 provides:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.Implementing this substantive law, Section 2(a) of Rule 131 provides:
SEC. 2. Conclusive presumptions. - The following are instances of conclusive presumptions:By its incorporation in the Civil Code, estoppel in our jurisdiction has become an equitable defense that is both substantive and remedial. Its successful invocation can therefore bar a right and not merely its equitable enforcement.[18]
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing is true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.
x x x x
As held by the Court of Appeals:
...Appellant had performed affirmative acts by residing in the questioned building and effecting partial payment of the loan. Appellant cannot now refute his acts or renege on the effects of the same to the prejudice of appellee Susana Bangayan. With said acts of the appellant, this court is convinced that appellant knew, authorized and even ratified the loan transaction between appellee Susana Bangayan and appellee PCIB.[19]Now, as to Reynaldo's claim for moral damages. For the award of moral damages to be granted, the following must exist: (1) there must be an injury clearly sustained by the claimant, whether physical, mental or psychological; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the award for damages is predicated on any of the cases stated in Article 2219 of the Civil Code.[20] However, these circumstances are not present in this case. Hence, we hold that petitioner is not entitled to moral damages.
As for petitioner's claim for exemplary damages, it is a requisite for the grant of exemplary damages that the act of the offender must be accompanied by bad faith or done in a wanton, fraudulent or malevolent manner.[21] In this case, there is no proof that respondents acted in a wanton, fraudulent or malevolent manner. Hence, there appears to be no basis for an award of exemplary damages.
As to the attorney's fees awarded to the banks, the general rule is that attorney's fees cannot be recovered as part of damages because no premium should be placed on the right to litigate. In short, attorney's fees as part of damages is the exception rather than the rule. Counsel's fees are not awarded every time a party prevails in a suit. It can be awarded only in the cases enumerated in Article 2208[22] of the Civil Code, and in all cases it must be reasonable, just, and equitable. While we respect the trial court's exercise of its discretion in this case, we find the award to each respondent bank of P50,000 attorney's fees excessive. Hence the fees should be reduced to P10,000[23] only for each respondent bank.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated December 1, 2000 and the Resolution dated February 16, 2001 of the Court of Appeals in CA-G.R. CV No. 61580 are AFFIRMED with the MODIFICATION that the attorney's fees awarded to each of the two respondent banks is reduced to P10,000 only. No pronouncement as to costs.
SO ORDERED.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
* Also known as "Susan" in other parts of the records.
[1] Rollo, pp. 23-29. Penned by Associate Justice Eugenio S. Labitoria, with Associate Justices Eloy R. Bello, Jr. and Eliezer R. De Los Santos.
[2] Id. at 30.
[3] Records, pp. 534-541. Penned by Judge Inocencio D. Maliaman.
[4] Id. at 1-5.
[5] Id. at 6-7.
[6] Id. at 17-19.
[7] Id. at 23-25.
[8] Id. at 52-53, 72-73.
[9] TSN, January 12, 1998, pp. 1-13; TSN, January 19, 1998, pp. 1-80.
[10] Records, pp. 106-113.
[11] TSN, September 30, 1997, pp. 1-35; TSN, October 7, 1997, pp. 1-39.
[12] Records, pp. 540-541.
[13] Rollo, p.28.
[14] Id. at 250.
[15] Id. at 242-257.
[16] Id. at 205-218.
[17] Id. at 228-241.
[18] Philippine Bank of Communications v. Court of Appeals, G.R. No. 109803, April 20, 1998, 289 SCRA 178, 185.
[19] Rollo, pp. 26-27.
[20] United Coconut Planters Bank v. Ramos, G.R. No. 147800, November 11, 2003, 415 SCRA 596, 612.
[21] Id. at 613.
[22] Art. 2208. In the absence of stipulation, attorney�s fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
| (1) | When exemplary damages are awarded; |
| (2) | When the defendant�s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; |
| (3) | In criminal cases of malicious prosecution against the plaintiff; |
| (4) | In case of a clearly unfounded civil action or proceeding against the plaintiff; |
| (5) | Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff�s plainly valid, just and demandable claim; |
| (6) | In actins for legal support; |
| (7) | In actions for the recovery of wages of household helpers, laborers and skilled workers; |
| (8) | In actions for indemnity under workmen�s compensation and employer�s liability laws; |
| (9) | In a separate civil action to recover civil liability arising from a crime; |
| (10) | When at least double judicial costs are awarded; |
| (11) | In any other case where the court deems it just and equitable that attorney�s fees and expenses of litigation should be recovered. |
In all cases, the attorney�s fees and expenses of litigation must be reasonable.
[23] American Home Assurance Company v. Chua, G.R. No. 130421, June 28, 1999, 309 SCRA 250, 264.
