Radiowealth Finance Company v. Spouses Vicente and Ma. Sumilang del Rosario
REITERATIONFacts
The Antecedents: Respondents, Spouses Vicente and Maria Sumilang del Rosario, executed a Promissory Note for P138,948 in favor of petitioner Radiowealth Finance Company. The note stipulated monthly installments of P11,579 for twelve months, with provisions for late payment penalties and attorney's fees. The respondents defaulted on their installment payments, and despite demands, failed to settle their obligation. Procedural History: Radiowealth Finance Company filed a collection suit against the Spouses del Rosario before the Regional Trial Court (RTC) of Manila. The RTC dismissed the complaint after the respondents filed a demurrer to evidence, finding the petitioner's evidence to be hearsay. On appeal, the Court of Appeals (CA) reversed the RTC's decision, finding that the respondents had admitted the due execution of the Promissory Note and other documentary evidence. However, the CA remanded the case to the RTC for further proceedings, prompting the petitioner to file the present petition. The Petition: Petitioner Radiowealth Finance Company seeks review of the CA's decision, arguing that the appellate court erred in remanding the case for further proceedings instead of rendering judgment on the merits based on the evidence presented. Petitioner contends that under Rule 33, Section 1 of the Rules of Court, a reversal of a dismissal order granted on a demurrer to evidence means the movant waives the right to present further evidence, and the appellate court should decide the case based on the plaintiff's evidence. The petition also addresses the due and demandable nature of the obligation, asserting that the respondents' default, evidenced by dishonored checks, triggered the acceleration clause, making the entire debt due.
Issue(s)
Whether the Court of Appeals erred in ordering the remand of the case to the trial court instead of rendering judgment on the basis of the petitioner's evidence. Whether the obligation of the respondents was due and demandable, and the amounts due.
Ruling
The Petition is GRANTED. The appealed Decision of the Court of Appeals is MODIFIED in that the remand is SET ASIDE and respondents are ordered to pay ₱138,948, plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the amount due as attorney's fees. No costs.
Ratio Decidendi
On the issue of remand after reversal of a demurrer to evidence: The Supreme Court held that when a demurrer to evidence is granted by the trial court and subsequently reversed on appeal, the defendant is deemed to have waived the right to present evidence. Rule 33, Section 1 of the 1997 Rules of Court explicitly states this consequence. The appellate court, upon reversing the dismissal order, should proceed to render judgment on the merits based on the plaintiff's evidence. Remanding the case for further proceedings would defy the Rules and the objective of discouraging prolonged litigations. In this case, the CA correctly reversed the RTC's dismissal but erred in remanding the case, as the respondents' admissions regarding the Promissory Note and demand letter were sufficient for judgment. On whether the obligation was due and demandable, and the amounts due: The Court found the respondents' contention that the installments were not yet due and demandable to be untenable. While the specific start date for installments was left blank in the Promissory Note, the Note clearly stipulated monthly installments and included an acceleration clause and a late payment penalty. These provisions indicated the parties' intention for the installments to be paid at definite dates. The contemporaneous and subsequent acts of the parties, including the respondents' initial payments (though dishonored), further supported the conclusion that the obligation was due and demandable. The Court ruled that the obligation matured and became due and demandable one month after the date of the Note, April 2, 1991, due to the dishonor of the first installment check, triggering the acceleration clause. The Court affirmed the principal obligation of ₱138,948.00. It disallowed the 14% interest per annum prayed for by the petitioner, finding it subsumed by the 2.5% monthly late payment penalty stipulated in the Note. The Court also found the stipulated liquidated damages to be unconscionable and deemed them included in the penalty. However, the Court awarded attorney's fees equivalent to 10 percent of the amount due, deeming it reasonable under the circumstances. The Court noted that respondents, not having appealed, were not entitled to affirmative relief.
Main Doctrine
When a demurrer to evidence granted by a trial court is reversed on appeal, the reviewing court cannot remand the case for further proceedings; rather, it should render judgment on the basis of the evidence proffered by the plaintiff, as the defendant is deemed to have waived the right to present evidence.