Gulam v. Santos
REITERATIONFacts
The Antecedents: Petitioner Jallaludin Abdulrahman Gulam and respondents Spouses Catalino and Ricarda Santos entered into a Contract to Sell on January 1994 for a 72-square meter parcel of land with a 2-storey townhouse for P1,700,000.00. Payment terms included P500,000.00 on the first month of construction, another P500,000.00 on the second month, the balance upon full payment, and a P50,000.00 reservation fee. A final deed of sale was to be executed upon full payment, with petitioner bearing taxes. Procedural History: Petitioner filed an action for Specific Performance against respondents, claiming full payment of P2,050,000.00. Respondents denied this, asserting only P1,000,000.00 (exclusive of the reservation fee) was paid, and counter-claimed for rescission. The Regional Trial Court (RTC) dismissed the complaint, ordered the rescission of the Contract to Sell, declared P1,100,000.00 forfeited as rental, and awarded damages and attorney's fees. The Court of Appeals (CA) affirmed the RTC decision with modifications to the damages awarded. The CA denied petitioner's motion for reconsideration. The Petition: Petitioner filed a petition for review on certiorari, assailing the RTC and CA decisions, primarily arguing that he had fully paid the stipulated price and that the courts erred in their appreciation of evidence and testimony.
Issue(s)
Whether the issue of full payment under the Contract to Sell is a question of fact or law. Whether the trial court gravely erred in concluding that the petitioner violated Sections 208 and 229 of Rule 132 of the Rules of Court. Whether the trial court gravely erred in holding that the petitioner was incompetent to testify on the due execution of the receipt in the Contract to Sell and the March 9, 1994 receipt. Whether the trial court gravely erred in holding that the petitioner failed to establish his claim and that the respondents were entitled to rescission due to fraudulent means and bad faith. Whether the trial court gravely erred in holding that the P1,100,000.00 admitted as received by the respondents should be applied as rental.
Ruling
The petition is DENIED. The Decision of the Court of Appeals dated June 22, 2001, and its Resolution dated January 10, 2002, are AFFIRMED.
Ratio Decidendi
On the issue of whether full payment is a question of fact or law: The Supreme Court reiterated that the question of whether petitioner fully paid the stipulated price under the Contract to Sell is a question of fact, which is not proper in a petition for review on certiorari under Rule 45 of the Rules of Court, as only questions of law may be raised therein. The Court found that none of the exceptions to this rule were present in the case, and thus, it was beyond the province of the Supreme Court to re-examine the factual findings of the lower courts. The Court emphasized that where the factual findings of both the RTC and the CA are in accord, they are binding on the Supreme Court, absent any capriciousness or palpable error. On the alleged violation of Sections 208 and 229 of Rule 132: The Court found no reversible error in the lower courts' findings regarding the evidence. The RTC gave no credence to the receipt acknowledging P500,000.00 allegedly signed by respondent Ricarda Santos on March 9, 1994, noting that Santos denied furnishing a specimen signature for comparison, and the PNP Crime Laboratory concluded the documents were written by two different persons. The RTC also noted that petitioner could not testify on alleged payments made by his wife, Norhaya, as he was not present, and gave weight to letters from Norhaya admitting a balance in the purchase price. On the competency of petitioner's testimony: The Supreme Court affirmed the ruling that petitioner could not testify on payments made by his wife, Norhaya, as it constituted hearsay evidence. The Court explained that a witness can only testify to facts within their personal knowledge. While statements made by the wife could be considered independently relevant statements, their admissibility does not equate to their weight and sufficiency as proof of the truth of the statements. The RTC and CA refused to give credence to petitioner's testimony, and the Supreme Court found no reason to doubt their assessment, especially since Norhaya herself did not provide credible testimony regarding these payments. On the failure to establish claims and entitlement to rescission: The Court agreed with the RTC and CA that petitioner failed to prove his claim of overpayment. The CA found that, excluding the allegedly forged receipt, petitioner had only paid P1,100,000.00, leaving an unpaid balance. This was bolstered by admissions in letters from petitioner and his wife stating lesser amounts paid. The Court concluded that petitioner committed a substantial breach by attempting to avoid his obligation through fraudulent means, including the use of a forged receipt. Consequently, the respondents were entitled to rescission of the Contract to Sell under Article 1191 of the Civil Code. On the application of P1,100,000.00 as rental: The RTC ordered the P1,100,000.00, admitted as paid, to be forfeited in favor of the respondents as rental for the house from June 1994 until judgment, and a monthly payment thereafter until the premises were vacated. The CA affirmed this, with modifications to damages. The Supreme Court found no reversible error in this aspect, as it was a consequence of the rescission due to petitioner's breach and failure to fully pay the purchase price.
Main Doctrine
The issue of whether a party has fully paid the stipulated price under a contract is a question of fact, not proper in a petition for review on certiorari under Rule 45, unless exceptions apply. Courts will not interfere with the factual findings of lower courts when they are in accord and not tainted with capriciousness or palpable error. Hearsay evidence is inadmissible and insufficient to prove claims, even if admissible as independently relevant statements, as its weight and sufficiency must be assessed against other evidence.