Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 172816 March 3, 2008
VIOLETA ESPINO, petitioner,
vs.
NORMANDY P. AMORA and NELIA B. AMORA, doing business under the name of NBA Enterprises, respondents.
D E C I S I O N
NACHURA, J.:
This petition for review on certiorari assails the Court of Appeals (CA) Decision in CA–G.R. CV No. 624611 which affirmed with modification the decision of the Regional Trial Court (RTC), Branch 254, Las Piñas City in Civil Case No. LP-97-0268.2
The facts, fairly summarized by the appellate court, follow.
[Respondents] Normandy and Nelia Amora, who were doing business under the trade name "NBA Enterprises", were suppliers of construction materials to building contractors and real estate firms. Among their clients were D.N. Tuangco Construction and Development Corporation and CEJ Construction, owned by the family of [petitioner] Violeta Espino, to which [respondents sold] on credit various construction materials since 1994.
[Espino's] total purchases on credit amounted to One Million Nine Hundred Ninety-Two Thousand Eight Hundred Thirty-Nine and 64/100 (P1,992,839.64) Pesos. Although [Espino had] already remitted the aggregate sum of Two Million Eighty-Five Thousand (P2,085,000.00) Pesos, [respondents] claim that the former still owe(s) the latter the amount of Nine Hundred Sixteen Thousand Two Hundred Eight and 77/100 (P916,208.77) Pesos, inclusive of interest at the rate of three percent (3%) per month, as of October 15, 1997. Thus, on November 10, 1997, [respondents] filed in the RTC a complaint for sum of money and damages which was docketed as Civil Case No. LP-97-0268.
For their defense, [Espino] averred full payment of [her] obligation and denied having agreed to the imposition of three percent (3%) interest per month which [she] considered usurious, illegal, and arbitrary as the stipulation in the delivery receipt clearly provided that if the bill is not paid within thirty (30) days from date of receipt, the buyer will pay interest at the rate of only twelve percent (12%) per annum.
Despite due notice, [Espino] did not file a pre-trial brief nor appear at the pre-trial hearing of this case. Thus, the trial court allowed [respondents] to present their evidence ex-parte. On August 21, 1998, the trial court denied [Espino's] motion for reconsideration and on October 15, 1998, rendered the assailed decision, the decretal portion of which reads:
WHEREFORE, [respondents] having satisfactorily proven the outstanding obligation of [Espino] in the amount of P1,109,716.94 as of March 31, 1998, [Espino is] hereby ordered to pay [respondents] said amount and attorney's fees amounting to 25% of the sum collectible. [Espino's] collectibles from the DPWH having been under garnishment, the DPWH is hereby ordered to release the amount or sum so much as to satisfy the judgment against [Espino] in the amount of P1,109,716.94. With cost.
In its order dated February 25, 1999, the trial court, upon motion of [Espino], reconsidered its earlier decision, thus:
WHEREFORE, premises considered, the assailed Decision is RECONSIDERED and the amount of P65,000.00 is ordered deducted from the amount of P1,109,716.64.3
On appeal, the CA affirmed the RTC's holding as to the subsisting obligation of Espino and the imposition of interest rates thereon. However, the CA limited the imposable rate of interest to twelve percent (12%) per annum. The award of attorney's fees was, likewise, modified to ten percent (10%) of Espino's outstanding balance as the CA deemed the trial court's award of twenty-five percent (25%) iniquitous and unconscionable. It disposed of the case, thus:
WHEREFORE, in view of the foregoing, the appealed decision and resolution of Branch 254, Regional Trial Court, Las Piñas City in Civil Case No. LP-97-0268 are MODIFIED that the interest rate is reduced to twelve percent (12%) per annum and the award of attorney's fees is reduced to ten percent (10%) of the amount collectible. In all other respects, the appealed decision is AFFIRMED.4
Consequently, Espino filed a Motion for Clarification and Reconsideration of the CA decision questioning the finding and computation of the outstanding balance plus the imposition of interest rates thereon. Espino maintains that she has fully settled and has, in fact, even paid over and above the total amount of her obligation to NBA Enterprises. In the alternative, Espino argues that the computation of her outstanding balance should not include the three percent (3%) per month interest rate unilaterally imposed by NBA Enterprises. Thus, Espino's actual obligation is simply equivalent to the value of the purchased goods plus the reduced rate of interest of twelve percent (12%) per annum as declared by the CA. However, the CA denied the Motion.
Undaunted, Espino comes to this Court positing the following issues:
1. Whether the CA erred in sustaining Espino's outstanding obligation to NBA Enterprises notwithstanding the P2,085,000.00 already remitted to the latter.
2. Corollarily, whether Espino's outstanding obligation pegged at P1,044,716.64 by the RTC is the correct base for applying the twelve percent (12%) reduced rate of interest imposed by the CA.
The petition is bereft of merit. We find no reason to depart from the finding of the RTC, and affirmed by the CA, that Espino has an outstanding obligation to NBA Enterprises for various purchases of construction materials.
We uphold the well-entrenched rule that factual findings of the trial court, especially when affirmed by the appellate court, are accorded the highest degree of respect and are considered conclusive between the parties.5 The rule, however, is not absolute and admits of exceptions upon a showing of highly meritorious circumstances, such as: (1) when the findings of a trial court are grounded entirely on speculation, surmises or conjectures; (2) when a lower court's inference from its factual findings is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in the appreciation of facts; (4) when the findings of the appellate court go beyond the issues of the case, or fail to notice certain relevant facts which, if properly considered, will justify a different conclusion; (5) when there is a misappreciation of facts; (6) when the findings of fact are conclusions without mention of the specific evidence on which they are based, are premised on the absence of evidence, or are contradicted by evidence on record.6 None of the laid down exceptions which would warrant a reversal of the assailed decision obtain herein.
Espino anchors her petition and assails the CA decision, on two grounds: (1) the original amount of the obligation set at P1,992,839.64 and undisputed by the parties which had, supposedly, already been offset against the installment payments totaling P2,085,000.00 effected by Espino as of September 1, 1997, resulting in a surplus of P92,160.64 to be considered as accrued interest on the obligation; and (2) the final computation of Espino's outstanding balance, if any, applying the twelve percent (12%) rate of interest imposed by the CA.
We do not subscribe to Espino's simplistic computation of her outstanding obligation to NBA Enterprises. Contrary to her assertion, the records reveal that the established arrangement between the parties afforded Espino a continuing credit line with NBA Enterprises for the purchase of construction materials which the former then pays through an installment scheme. For these purchases paid on installment, NBA Enterprises charged a monthly interest of three percent (3%) on the remaining balance of the obligation. The total purchases minus the tendered installment payments, plus the accrued interest, are all reflected in a statement of account for a given period prepared by NBA Enterprises. Unarguably, from 1994, Espino acquiesced and conformed to this arrangement. She did not dispute or question how NBA Enterprises arrived at her outstanding obligation. In fact, Espino even certified as correct the statement of account dated July 15, 1996 by NBA Enterprises reflecting the computation of her principal obligation of P977,215.46.7 She likewise acknowledged this same amount of liability and obligation to NBA Enterprises in a Deed of Assignment8 covering her collectibles from the Department of Public Works and Highways (DPWH). Consequently, although this Deed of Assignment is not notarized and remains ineffective against third persons, it does not detract from Espino's explicit acknowledgment of her debt.9
And in yet another categorical acknowledgment of her obligation and the amount thereof, Espino signed her conformity to the declarations and statements in respondent Normandy Amora's Affidavit10 dated July 22, 1996.
Significantly, the amount of P1,992,839.64 which Espino does not dispute, not only covers the purchases for the period of July to October 1995, but it also includes the outstanding balance of P90,000.00 for previous purchases she had made plus interest thereon.11 We note that Espino's Answer12 failed to specifically deny paragraph 6 of the Complaint13 which reads:
6. Sometime between July and October 1995, [Espino] purchased from [NBA Enterprises] various construction materials, such as reinforcing steel bars, cement in bags and other related materials, in the sum of ONE MILLION NINE HUNDRED THOUSAND (PHP1,900,000.00) PESOS. As there was a previous balance of NINETY THOUSAND (PHP90,000.00) PESOS, more or less, due from [Espino] to [NBA Enterprises], the liability of [Espino] rose to a total of ONE MILLION NINE HUNDRED NINETY-TWO THOUSAND EIGHT HUNDRED THIRTY-NINE & 64/100 (PHP1,992,839.64) PESOS.
Evidently, Espino's belated challenge to NBA Enterprises' computation of her outstanding obligation and its imposition of interest thereon is unavailing given her prior unequivocal acquiescence thereto.
Moreover, Espino's contention of excess payment on a supposed principal obligation of P1,992,839.64 fails to take into account additional purchases on credit she had made. The adduced installment payments were effected not only for the purchases in 1995, but to diminish Espino's outstanding obligation and, thereby, continue to benefit from the credit arrangement.
Clearly, Espino cannot now inveigle out of the established arrangement after having been allowed continuous purchases on credit by NBA Enterprises without paying up front the entire amount of her outstanding obligation. Both the trial and appellate courts uniformly held, thus:
As correctly ruled by the court a quo, the parties entered into a contract of sale on credit and, thus, Article 1589 of the Civil Code applies, to wit:
Art. 1589. The vendee shall owe interest for the period between the delivery of the thing and the payment of the price, in the following three cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of the price.
Clearly, the law makes the buyer liable to pay interest on the unpaid purchase price. Considering the amount of appellants' obligation and the period of time that had elapsed between the delivery of the construction materials and the payment of the purchase price, this Court disagrees with appellants that the amount of Ninety Two Thousand One Hundred Sixty and 64/100 (92,160.64) Pesos is already enough to cover the interest which have (sic) accrued on their unpaid obligation.
It stands to reason, therefore, that Espino remains obligated to NBA Enterprises.
Coming now to the actual amount of Espino's obligation and applying the reduced interest rate of twelve percent (12%) thereon, it is apparent from the records that as of July 1996 the undisputed amount of the obligation was P977,215.46. Espino categorically acknowledged this amount on three (3) separate occasions: (1) the statement of account dated July 15, 1996 bearing Espino's certification as to the correctness of the computation; (2) the Deed of Assignment dated July 19, 1996; and (3) the Affidavit of Normandy P. Amora executed on July 22, 1996 with Espino's conformity. However, in March 1997, as evidenced by the exchange of letters between Espino and NBA Enterprises,14 as well as correspondence to DPWH regarding Espino's remaining collectibles therewith,15 Espino began to refute NBA Enterprises' computation of her outstanding obligation, specifically the imposition of interest rate at three percent (3%) per month. At that point, Espino belatedly conceded an outstanding obligation of only P245,239.64 which, curiously, remains a bare-faced unsubstantiated assertion.
We are not unmindful of the fact that as of June 1997, NBA Enterprises' demand for payment was reduced from the undisputed amount of P977,215.46 to only P818,342.56 as it deducted some payments made by Espino.16 However, NBA Enterprises continued to charge compounded interest even against Espino's protestations. Thereafter, from the filing of the Complaint on November 10, 1997, the claimed obligation now rose to P916,208.77,17 exclusive of the claim for damages and attorney's fees, computed by NBA Enterprises at an interest rate of three percent (3%) per month.18 In short, from the principal obligation of P977,215.46 which, to reiterate, Espino acquiesced to, NBA Enterprises simply claims a principal obligation of P818,342.56, exclusive of unilaterally imposed interest rate.
It is on this point that a palpable conflict arises between the RTC and the CA decisions, which reduced the imposable rate of interest to twelve percent (12%) per annum. In this connection, we affirm the appellate court's reduction of the applicable interest rate.19 We likewise sustain the CA's reduction of the RTC's award of attorney's fees from twenty-five percent (25%) to ten percent (10%) of the amount collectible.20
Nevertheless, we observe that the CA decision and its subsequent resolution denying Espino's Motion for Clarification and Reconsideration, failed to specify the actual amount owed by Espino to NBA Enterprises, applying the reduced interest rate of twelve percent (12%) per annum. It was incumbent upon the appellate court, considering that Espino had already moved for clarification, to explain the modification in the RTC decision as stated in the dispositive portion of the CA decision.
In fine, for clarity and to obviate confusion, we hold that Espino's outstanding obligation is P818,342.56 which shall earn interest at twelve percent (12%) per annum from the date of judicial demand or from the filing of the complaint on November 10, 1997.21 The reduction of the RTC's award is in order considering that the evidence presented ex-parte by NBA Enterprises ineluctably shows that Espino's indebtedness at the time of the filing of the complaint was only in the amount of P818,342.56.
WHEREFORE, the Petition is DENIED. Petitioner Violeta Espino is ordered to pay respondents Normandy P. Amora and Nelia B. Amora, doing business under the name of NBA Enterprises, the following amounts:
(1) P818,342.56 plus interest at 12% per annum from judicial demand on November 10, 1997;
(2) Legal interest of 12% per annum on the total amount due from the finality of this decision until fully paid;22
(3) The amount equivalent to 10% of the amount due as attorney's fees; and
(4) Costs of suit.
SO ORDERED.
Ynares-Santiago, Chairperson, Austria-Martinez, Chico-Nazario, Reyes, JJ., concur.
Footnotes
1 Dated January 31, 2006 and penned by Associate Justice Sesinando E. Villon, with Associate Justices Edgardo P. Cruz and Rosalinda Asuncion-Vicente, concurring; rollo, pp. 23-32.
2 Dated October 15, 1998 and penned by Judge Manuel B. Fernandez, Jr.; id. at 83-86.
3 Rollo, pp. 24-25.
4 Rollo, p. 29.
5 Titan Construction Corporation v. Uni-Field Enterprises, Inc., G.R. No. 153874, March 1, 2007, 517 SCRA 180, 186; Sigaya v. Mayuga, G.R. No. 143254, August 18, 2005, 467 SCRA 341, 353.
6 Ilao-Quianay v. Mapile, G.R. No. 154087, October 25, 2005, 474 SCRA 246, 253; See Child Learning Center, Inc. v. Tagorio, G.R. No. 150920, November 25, 2005, 476 SCRA 236, 241-242.
7 Rollo, p. 44.
8 Id. at 47-48.
9 See Title VI, Chapter 8 on Assignment of Credits and other Incorporeal Rights by the Civil Code.
Article 1625 of the Civil Code provides:
An assignment of a credit, right or action shall produce no effect as against third persons, unless it appears in a public instrument, or the instrument is recorded in the Registry of Property in case the assignment involves the real property.
10 Rollo, p. 45.
11 Id. at 68.
12 Id. at 60-66.
13 Id. at 34.
14 NBA Enterprises' demand letter dated April 7, 1997 in reply to Espino's letter dated March 18, 1997, rollo, pp. 52-53; NBA Enterprises' counsel's letter dated June 20, 1997 reiterating the demand for payment of the obligation, rollo, pp. 56-57.
15 Espino's letter dated March 31, 1997, id. at 51; NBA Enterprises' letter on its third-party claim dated April 17, 1997, id. at 54-55.
16 Rollo, pp. 56-57.
17 As of October 15, 1997.
18 NBA Enterprises' prayer in its Complaint dated October 29, 1997, id. at 41.
19 See Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95.
20 See Titan Construction Corporation v. Uni-Field Enterprises, Inc., supra note 5; Manzano v. Despabiladeras, G.R. No. 148786, December 16, 2004, 447 SCRA 123, 135.
21 Eastern Shipping Lines, Inc. v. Court of Appeals, supra note 19.
22 See Cuyco v. Cuyco, G.R. No. 168736, April 19, 2006, 487 SCRA 693.
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