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G.R. No.

134728 February 23, 2006


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G.R. No. 134794 February 23, 2006


FACTS: Ricardo Montinola, Jr. and Ramon Monfort the plaintiffs in the trial court who are sugarcane planters have
obtained a crop loan credit line with therein defendant Republic Planters Bank (RPB) for the crop year 1982-1983. On
July 1982, the plaintiffs sought to withdraw on the remaining crop loan credit line of Montinola, Jr. which RPB refused
to release because the plaintiffs filed a civil case against the bank. The plaintiffs have made a formal written demand
upon RPB for the release of the balance of their crop loan but the bank still refused.

Consequently, on November 1982, the plaintiffs filed a joint complaint for breach of contract and damages
with preliminary mandatory injunction against RPB with the RTC of Bacolod City where the court decided in favor of
the plaintiffs with the award of actual damages in the amount ofP1,500,000.00; by way of moral and exemplary
damages in its wanton and malicious breach of contractual relationP1,500,000.00 and the payment of attorneys fees
in the amount of P350,000.00 plus costs.

The RPBappealed the RTC decision to the CAwhere the latter affirmed the trial courts decision with
modificationthat the award in favor of plaintiffs-appellees of actual damages is reduced to P500,000.00, moral and
exemplary damages to P500,000.00, and attorneys fees to P200,000.00.

Both of the parties appealed, hence, this consolidated case.

1. G.R. No. 134728:Wether or not the Court of Appeals erred in awarding damages to respondents without
legal and factual bases and even assuming respondents are entitled to it the aggreagateaward of
damages is patently excessive, disproportionate and way out of proportion.
2. G.R. No. 134794: Whether or not the Court of Appeapls erred or abused its discretion amounting to
lack of jurisdiction in reducing the award of damages.

The Court finds both petitions lacking in merit.

1. No, the Court did not erred in awarding damages to the respondent as resolved unanimously by the trial
court and the CA where both courts concluded that "appellant Bank had maliciously and in bad faith
unilaterally suspended the credit line of plaintiffs-appellees [Montinola, Jr. and Monfort] thereby justifying the
order of the trial court for payment in favor of plaintiffs-appellees of actual, moral and compensatory
damages." The sufficiency of the evidence on record to support the same is crystal clear.

2. No, the Court did not erred in reducing the award of damages in the actual damages from P1,500,000.00
to P500,000.00, the Court agrees with the CA as under Article 2199 of the NCCthat to prove the actual
damages the best evidence available to the injured party must be presented to the court as the latter cannot
rely on uncorroborated testimony whose truth is suspect but must depend upon competent proof that
damages have been actually suffered wherein the Appellant Bank had shown proof that the balance left
available to plaintiffs-appellees under their crop loan as of July 1982 was only minimal which the
suspension of further release of funds representing the balance could not have directly affected the entire
production for crop year 1982-1983.

Finally, considering the facts and circumstances obtaining in the case, the Court finds no reversible
error on the part of the CA in reducing the award for moral and exemplary damages to the more reasonable
amount ofP500,000.00, and the attorneys fees to P200,000.00 as sated under Article 2216 of the NCC that
assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the
circumstances of each case.In fine, the CA correctly exercised its wise discretion by reducing the amounts

Both petitions are DENIED for lack of merit and the assailed decision of the Court of Appeals AFFIRMED.

G.R. No. 145871 January 31, 2006


FACTS: On December 14, 1992, Leonides C. Dio (petitioner) filed a Petition for Consolidation of Ownership with the
RTC of Baguio City, Branch 7 (RTC) alleging that on January 31, 1987, LinaJardines (respondent) executed in her
favor a Deed of Sale with Pacto de Retro over a parcel of land with improvements thereon the consideration for which
is P165,000.00 that it was stipulated in the deed that the period for redemption would expire in six months or on July
29, 1987 and such period expired but neither respondent nor any of her legal representatives were able to redeem or
repurchase the subject property as a consequence, absolute ownership over the property has been consolidated in
favor of petitioner.

However the respondent countered that the deed did not embody the real intention of the parties as the
transaction actually entered into by the parties was one of simple loan and the Deed of Sale withPacto de Retro was
executed just as a security for the loan but it was never the intention of respondent to sell her property to petitioner as
the value of respondents residential house with the lot is over a million pesos it is unthinkable that respondent would
sell her property worth over a million pesos for only P165,000.00 and respondent has even paid a total of P55,000.00
out of the amount borrowed and she is willing to settle the unpaid amount, but petitioner insisted on appropriating the
property of respondent which she put up as collateral for the loan. The respondent has been the one paying for the
realty taxes on the subject property; and due to the malicious suit filed by petitioner, respondent suffered moral

On September 14, 1993, petitioner filed an Amended Complaint adding allegations that she suffered actual
and moral damages and prayed that she be declared the absolute owner of the property and/or that respondent be
ordered to pay her P165,000.00 plus the agreed monthly interest of 10%; moral and exemplary damages, attorneys
fees and expenses of litigation.

The RTC rendered its decision in favor of the petitioner and awarded actual and/or compensatory damage to
the latter P3,000.00 representing expenses in going to and from Jardines place to collect the redemption
money; P1,000.00 times the number of times Dio came to Baguio to attend the hearing of the case as evidenced by
the signatures of Dio appearing on the minutes of the proceedings found in the Rollo of the case; P10,000.00
attorneys fee.

The respondent appealed to the CA which reversed the RTC judgment and held that the true nature of the
contract between herein parties is one of equitable mortgage, as shown by the fact that (a) respondent is still in actual
physical possession of the property; (b) respondent is the one paying the real property taxes on the property; and (c)
the amount of the supposed sale price, P165,000.00, earns monthly interest. The petitioner moved for
reconsideration of said decision, but the same was denied.

Hence, thispetition.

1. Whether or not the contract entered into was an equitable mortgage.
2. Whether or not the CA committed an error in deleting the award of damages despite the fact that the
same was not raised as issue in the appeal.

HELD: The petition lacks merit.

1. The CA correctly ruled that the true nature of the contract entered into by herein parties was one of
equitable mortgage the presence of the circumstances provided for under paragraphs (2) and (5) of
Article 1602 of the Civil Code, and the fact that petitioner herself demands payment of interests on the
purported purchase price of the subject property, clearly show that the intention of the parties was
merely for the property to stand as security for a loan. In addition, Article 1603 of the Civil Code,
provides that in case of doubt, a contract purporting to be a sale with right to repurchase shall be
construed as an equitable mortgage.

2. No, the CA did not commit an error in deleting the award for actual and/or compensatory damages as
under Section 8, Rule 51 of the Rules of Courtthe appellate court may pass upon plain errors even if
they are not stated in the assignment of errors for the Court is clothed with ample authority to review
matters, even if they are not assigned as errors in the appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case.
The RTCs award for actual damages is a plain error because there is no sufficient evidence
on record to prove that petitioner is entitled to the same for Petitioners only evidence to prove her claim
for actual damages is her testimony that she has spentP3,000.00 in going to and from respondents
place to try to collect payment and that she spent P1,000.00 every time she travels from Bulacan,
where she resides, to Baguio in order to attend the hearings.As the Court held that a witness testimony
cannot be "considered as competent proof and cannot replace the probative value of official receipts to
justify the award of actual damages, for jurisprudence instructs that the same must be duly
substantiated by receipts." Hence, there being no official receipts whatsoever to support petitioners
claim for actual or compensatory damages, said claim must be denied.

The petition is denied and the Decision of the Court of Appeals is affirmed with
the modification.