G.R. No. 142944




Republic of the Philippines SUPREME COURT THIRD DIVISION G.R. No. 142944. April 15, 2005 EDENBERT MADRIGAL AND VIRGILIO MALLARI, Petitioners, vs. THE COURT OF APPEALS AND JOSE MALLARI, Respondents. D E C I S I O N GARCIA, J.: Under consideration is this appeal by way of a petition for review on certiorari under Rule 45 of the Rules of Court to nullify and set aside the following issuances of the Court of Appeals in CA-G.R. CV No. 45488, to wit: 1. Decision dated 15 October 1999,1 affirming an earlier decision of the Regional Trial Court at Olongapo City in a suit for annulment, redemption and damages with prayer for preliminary injunction and/or temporary restraining order, thereat commenced by the herein private respondent against the petitioners; and 2. Resolution dated 10 April 2000,2 denying petitioners’ motion for reconsideration. The case is cast against the following factual backdrop: Private respondent Jose Mallari and his wife Fermina Mallari are the owners of a 340-square meter residential lot with a 2-storey residential house erected thereon, situated at Olongapo City. The couple had ten (10) children, five (5) of whom are staying with them in the same house while the other five (5) are either residing abroad or elsewhere in the Philippines. In need of money for his wife’s planned travel to the United States, Jose thought of mortgaging the above property with a bank. However, his son Virgilio Mallari who is residing with his own family somewhere in San Ildefonso, Bulacan convinced Jose not to proceed with the intended mortgage and to instead assign to him a portion of the same property, assuring his father that the latter could continue in occupancy of the property and that he will allow his sister Elizabeth who operates a store thereat to continue with the same. Virgilio told his father, however, that he will occupy one of the rooms in the house in case he goes to Olongapo City on vacation and that he will renovate the other room and reserve it for his mother when she comes back from the States. Virgilio assured his father that he will not dispose of the property without his father’s consent and that the latter could redeem the said property any time he acquires money. And so, finding no reason to doubt Virgilio’s words, Jose did not anymore proceed with his original idea of mortgaging the property with a bank. Instead, on 22 October 1987, he and his wife Fermina executed a document denominated as "Deed of Absolute Sale", whereunder the couple appeared to have conveyed to their son Virgilio Mallari the house and lot in question for a consideration of ₱50,000.00 although the property easily commands much more at that time. Worse, the deed of conveyance described the properties sold as a one-storey residential house and the 135-square meter lot whereon it stands even as the subject properties actually consist of a 2-storey residential house sitting on a 340-square meter parcel of land. Things turned for the worse to the unsuspecting Jose Mallari when, without his knowledge, his son Virgilio, via a document bearing date 25 June 1988 and entitled "*Kasulatan ng Bilihang Tuluyan", sold the same property for the same amount of ₱50,000.00 to Edenbert Madrigal, a longtime neighbor of the Mallaris in the area. True enough, sometime thereafter, to Jose’s great shock, he was demanded by Edenbert Madrigal to vacate the subject property. It was then that Jose came to know for the first time of the sale of his property by his son Virgilio in favor of Edenbert Madrigal thru the aforementioned June 25, 1988 "Kasulatan ng Bilihang Tuluyan". It was against the foregoing backdrop of events when, on 7 September 1988, in the Regional Trial Court at Olongapo City, Jose Mallari filed against his son Virgilio Mallari and Edenbert Madrigal the complaint for annulment, redemption and damages with prayer for preliminary injunction/temporary restraining order in this case. In his complaint, docketed in the same court as Civil Case No. 481-0-88 and raffled to Branch 72 thereof, plaintiff Jose Mallari prayed that the Deed of Absolute Sale executed by him and his wife Fermina on 22 October 1987 in favor of their son Virgilio Mallari be declared null and void, or, in the alternative, that he be allowed to redeem the subject property at a reasonable price. He likewise prayed the court for a writ of preliminary injunction and/or to issue ex parte a temporary restraining order enjoining defendants Virgilio Mallari and Edenbert Madrigal from entering, demolishing or introducing improvements on the subject properties, plus an award of actual and moral damages and attorney’s fees. After due proceedings, the trial court, in a decision dated 29 September 1993,3 rendered judgment for plaintiff Jose Mallari by ordering defendant Edenbert Madrigal to allow the former to redeem the subject property based on the same amount it was sold to him by his co-defendant Virgilio Mallari, and for the two (2) defendants jointly and severally to pay plaintiff Jose Mallari moral and exemplary damages, attorney’s fees and the cost of suit. More specifically, the trial court’s decision dispositively reads: "PREMISES CONSIDERED, this Court finds and so holds that since plaintiff has sufficiently established preponderance of evidence against the defendants, judgment is hereby rendered ordering defendant Edenbert Madrigal to allow plaintiff to redeem the subject property based on the consideration of sale marked as Exhibit ‘B’; and for defendants jointly and severally to pay plaintiff (1) moral damages in the sum of ₱15,000.00; (2) exemplary damages of ₱5,000.00; (3) ₱10,000.00 as attorney’s fees; and (4) to pay the cost of suit. All claims of defendants are denied for lack of merit. SO ORDERED." Obviously dissatisfied, both defendants went on appeal to the Court of Appeals whereat their recourse was docketed as CA-G.R. CV No. 45488. As stated at threshold hereof, the Court of Appeals, in a decision dated 15 October 1999,4 affirmed en toto* the appealed decision of the trial court, thus: WHEREFORE, finding that the lower court did not err in issuing the assailed Decision, this Court hereby AFFIRMS the same in its entirety. SO ORDERED. In time, appellants Virgilio Mallari and Edenbert Madrigal moved for a reconsideration but their motion was denied by the appellate court in its Resolution of 10 April 2000.5 Hence, their present recourse, submitting for our consideration the following issues: "I WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE QUESTIONED DEED OF SALE IS A MORTGAGE II WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT RULING THAT PETITIONER EDENBERT MADRIGAL WAS A BUYER ON (sic) GOOD FAITH III WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURT’S DECISION AWARDING MORAL, EXEMPLARY DAMAGES AND ATTORNEY’S FEES IN FAVOR OF PRIVATE RESPONDENT" We DENY. Petitioners fault the two (2) courts below for construing the Deed of Absolute Sale executed by private respondent Jose Mallari and his wife Fermina Mallari in favor of their son Virgilio Mallari as an equitable mortgage and not as an outright sale as the document itself proclaims. We rule and so hold that both courts correctly construed the aforementioned Deed of Absolute Sale as an equitable mortgage and not a sale, as it purports to be. As aptly pointed out by the Court of Appeals in its assailed decision of 15 October 1999, to which we are in full accord: "xxx. Evidence clearly shows that there was indeed no intent to sell the subject property. Rather, what transpired between the parties, who were father and son, was only a mortgage involving ₱50,000.00 over a portion of a lot with a house in Olongapo City. Circumstances surrounding the transaction between [respondent Jose Mallari] and [petitioner] Virgilio Mallari pointed only to one thing, that [respondent Jose Mallari] was in need of money to finance the US trip of his wife and he planned to mortgage the subject property with a bank but he was prevailed by his son, herein [petitioner] Virgilio Mallari, not to proceed with his plan and he gave a tempting offer to his father which the latter cannot refuse. In dire need of money, coupled with the fact that the one who offered help was his son who agreed to all the conditions such as, the property will not be disposed without the consent of [respondent]; petitioner [Virgilio Mallari]will renovate a room which will be used by his mother upon her return from the US; [petitioner Virgilio Mallari] will allow his sister to continue using a portion of the property as a store; one room will be for [petitioner Virgilio Mallari’s] use while on vacation; and [respondent Jose Mallari] would redeem the property as soon as his finances will improve and for [petitioner Virgilio Mallari] to return the same, [respondent Jose Mallari] signed a document, a Deed of Sale, although the agreement was only a mortgage. The consideration appearing in the Deed of Sale is grossly inadequate considering the location of the property, the area and the fact that it was a two-storey building or house. If the intention was really to sell, why was there a need for [petitioner Virgilio Mallari] to seek the consent of [respondent Jose Mallari] if the property will be sold to third person?" Consistent with their thesis that the aforesaid Deed of Absolute Sale executed by Virgilio’s parents is clearly a document of sale as its very language unmistakably states, petitioners fault the trial court for receiving parol evidence to establish that the instrument in question is actually one of equitable mortgage. Indirectly, petitioners also put the Court of Appeals to task for giving weight to those evidence instead of rejecting them, conformably with the Parol Evidence Rule under Section 9, Rule 130 of the Rules of Court. We are not persuaded. To begin with, we cannot view the Deed of Absolute Sale in question in isolation of the circumstances under which the same was executed by Virgilio’s parents, more so in the light of his father’s disavowal of what the document, on its face, purports to state. Then, too, there is the ruling of this Court in *Lustan vs. CA6 to the effect that even if the document appears to be a sale, parol evidence may be resorted to if the same does not express the true intent of the parties. In the very words of Lustan:* "Even when a document appears on its face to be a sale, the owner of the property may prove that the contract is really a loan with mortgage by raising as an issue the fact that the document does not express the true intent of the parties. In this case, parol evidence then becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the repayment of a loan. And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the execution of the contract". In any event, at bottom of petitioners’ first submission is their inability to accept the factual findings of the two (2) courts below that the transaction between petitioner Virgilio Mallari and his parents, albeit denominated as one of absolute sale, is in reality an equitable mortgage. In short, petitioners would want us to revisit the factual findings of both courts, scrutinize and examine those findings anew and calibrate the validity of their conclusions on the basis of our own factual assessment. The desired task cannot be done. Time and again, we have made it clear that this Court is not a trier of facts, and that in a petition for review under Rule 45, only questions of law may be raised in this Court. To reiterate what we have said in *Bernardo vs. CA:7 "The Supreme Court’s jurisdiction is limited to reviewing errors of law that may have been committed by the lower court. The Supreme Court is not a trier of facts. It leaves these matters to the lower court, which have more opportunity and facilities to examine these matters. This same Court has declared that it is the policy of the Court to defer to the factual findings of the trial judge, who has the advantage of directly observing the witnesses on the stand and to determine their demeanor whether they are telling or distorting the truth." And again in Remalante vs. Tibe:8 "The rule in this jurisdiction is that only questions of law may be raised in a petition for certiorari under Rule 45 of the Revised Rules of Court. ‘The jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals is limited to reviewing and revising the errors of law imputed to it, its findings of fact being conclusive.’ [Chan vs. Court of Appeals, G.R. No. L-27488, June 30, 1970, 33 SCRA 737, reiterating a long line of decisions]. This Court has emphatically declared that ‘it is not the function of the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of law that might have been committed by the lower court’ [Tiongco v. De la Merced, G.R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona vs. Court of Appeals, G.R. No. L-62482, April 28, 1983, 121 SCRA 865; Banigued vs. Court of Appeals, G.R. No. L-47531, February 20, 1984, 127 SCRA 596]." We do acknowledge that the rule thus stated is not casts in stone. For sure, it admits of exceptions. So it is that in Insular Life Assurance Company, Ltd. Vs. CA,9 we wrote: "[i]t is a settled rule that in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts of the CA are conclusive and binding on the Court. However, the Court had recognized several exceptions to this rule, to wit: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion." Unfortunately for the petitioners, however, we have made a close hard look into this case and found none of the foregoing exceptions as obtaining herein to warrant our departure from the established norm. Nor are we inclined to disturb the findings of the two (2) courts below that petitioner Edenbert Madrigal is not buyer in good faith. Again, a reversal of such finding would impose upon us a reevaluation of the same set of facts appreciated by said courts in arriving at their common conclusion that Madrigal, contrary to what he proclaims himself to be, is not a buyer in good faith. At any rate, we nonetheless took the pains of reviewing the factors taken into account by both courts in rejecting Madrigal’s claim of being a buyer in good faith and found no reason to disagree with their rejection thereof. With the view we take of this case, petitioners’ lament against the award of moral and exemplary damages and attorney’s fees in favor of respondent Jose Mallari, based as their lament is on their contention that respondent has no cause of action against them, must simply fall. WHEREFORE, the instant petition is hereby DENIED and the assailed decision and resolution of the Court of Appeals AFFIRMED. Costs against petitioners. SO ORDERED. Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur. Footnotes* 1 Penned by Associate Justice Remedios Salazar-Fernando and concurred in by Associate Justices Buenaventura J. Guerrero and Portia A. Hormachuelos. 2 Rollo, p. 38. 3 Rollo, pp. 65-69. 4 Rollo, pp. 70-77. 5 Rollo, p. 38. 6 334 Phil. 609 [1997]. 7 216 SCRA 244 [1992]. 8 158 SCRA 138 [1988]. 9 G.R. No. 126850, April 28, 2004. The Lawphil Project - Arellano Law Foundation