Caoili v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Spouses Rodolfo and Imelda Caoili were lessees of a parcel of land with an apartment unit owned by private respondent Rosita Vda. de Santiago. On March 30, 1987, private respondent obtained a P30,000.00 loan from petitioners, with the agreement that rentals would be offset until the loan was paid. On July 10, 1990, an informal agreement for the sale of the property was made. On December 14, 1990, a notarized "Receipt" denominated as an "Addendum to Agreement dated August 8, 1990" was signed by private respondent, acknowledging the sale of the property for P250,000.00, with P140,000.00 received in addition to a P60,000.00 partial payment. The balance was payable upon delivery of a good title. Petitioners sent demand letters for the title or a refund of double the amount received (P430,000.00). Private respondent refused to comply. Procedural History: Petitioners filed a complaint for collection of sum of money with the Regional Trial Court (RTC) of Manila, Branch 31. The RTC ruled in favor of the petitioners, ordering private respondent to pay P489,520.00 (double the P244,760.00 claimed as paid) with legal interest, attorney's fees, and costs. Private respondent appealed to the Court of Appeals (CA). The CA set aside the RTC decision and ordered private respondent to pay P33,600.00 with legal interest. Petitioners filed a Motion for Reconsideration and a Supplemental Motion for Reconsideration, both of which were denied by the CA. The Petition: Petitioners filed a petition for review on certiorari with the Supreme Court, arguing that the CA erred in reducing the awarded amount from P489,520.00 to P33,600.00, contending that the evidence substantiated their claims and that private respondent acted in bad faith.
Issue(s)
Whether the Court of Appeals erred in reducing the amount awarded by the Regional Trial Court. Whether Exhibit "B", the "Receipt" and "Addendum to Agreement dated August 8, 1990", is a valid and binding document evidencing a contract of sale. Whether private respondent is obligated to refund double the amount received by her due to failure to deliver a good title.
Ruling
The Supreme Court reinstated the decision of the Regional Trial Court, setting aside the decision of the Court of Appeals. The Court ruled that Exhibit "B" is a valid and binding document evidencing a contract of sale, and due to the failure of private respondent to deliver a good title, she is obligated to pay double the amount acknowledged as received in Exhibit "B".
Ratio Decidendi
On the issue of whether the Court of Appeals erred in reducing the amount awarded: The Supreme Court held that the issue of whether the CA erred in reducing the award involves a question of fact, which is generally not reviewable by the Supreme Court. However, an exception exists when the findings of fact of the CA are contrary to those of the trial court. In this case, the RTC found Exhibit "B" to be valid and binding, while the CA questioned its authenticity. The Supreme Court found that the RTC's findings were more consistent with the evidence presented, particularly the notarized Exhibit "B". Therefore, the Court found merit in reviewing the CA's modification of the award. On whether Exhibit "B" is a valid and binding document evidencing a contract of sale: The Court found that Exhibit "B", a notarized "Receipt" and "Addendum to Agreement dated August 8, 1990", is a public document and prima facie evidence of the facts stated therein. It clearly shows a meeting of the minds on the object (the property) and the price (P250,000.00). The document acknowledges receipt of P140,000.00 in addition to a P60,000.00 partial payment. The agreement was subject to the condition of delivering a good title, with a penal clause for refunding double the amount if the title was not good and could not be made good within a reasonable time. The absence of a formal deed of sale does not invalidate the contract, as the essential requisites of consent, object, and cause were present. Subsequent receipts (Exhibits "C" to "J") further corroborated the sale. On whether private respondent is obligated to refund double the amount received: The Court found that private respondent failed to deliver a good title to the petitioners, which was a condition precedent for the payment of the balance of the purchase price. Under Article 1545 of the Civil Code, petitioners had the right to refuse to proceed or waive the condition. However, Exhibit "B" also stipulated a penal clause: "if the title to said premises is not good and cannot be made good within a reasonable time then this agreement shall be null and void and the above amount in double the amount shall be refunded and paid to the vendee." Since private respondent failed to deliver a good title and there was no proof that the condition could not be made good within a reasonable time, the penal clause was triggered. The RTC correctly applied this by ordering the refund of double the amount claimed by petitioners as paid, which was P244,760.00, resulting in P489,520.00.
Main Doctrine
A notarized receipt, acknowledged before a notary public, is considered a public document and constitutes prima facie evidence of the facts stated therein. In a contract of sale, the failure to deliver a good title, as stipulated, may entitle the vendee to refuse to proceed with the contract or waive the condition, or treat the nonperformance as a breach of warranty, and if a penal clause for refund is stipulated, the vendor may be bound to comply therewith.