Surtida v. Rural Bank of Malinao
REITERATIONFacts
The Antecedents: Spouses Pedro and Paz Surtida executed a real estate mortgage over their residential land as security for a P100,000.00 loan from Rural Bank of Malinao (Albay), Inc. (Rural Bank). They subsequently obtained two loans, evidenced by promissory notes dated June 16, 1986 (P149,500.00) and November 4, 1987 (P106,800.00), receiving the net proceeds via cashier's checks. The spouses Surtida failed to pay their loans. On August 31, 1989, they executed a Dation in Payment over a portion of their property for P157,968.20, and another on January 5, 1990. In January 1993, the Rural Bank offered them a preferential right to repurchase the property, which they rejected. The bank then demanded they vacate the ceded portion, which the spouses Surtida refused, denying any loan and claiming the mortgage and dation documents were simulated contracts. Procedural History: The Rural Bank filed an unlawful detainer case. The spouses Surtida, in turn, filed a complaint for annulment of the promissory notes, real estate mortgage, and dation in payment, alleging they never secured loans and the documents were fictitious, made to enable the bank to avail of rediscounting facilities. The Regional Trial Court (RTC) ruled in favor of the spouses Surtida, declaring the dation in payment, promissory notes, and real estate mortgage null and void for lack of consideration and finding that the bank took advantage of the spouses' friendship with its majority stockholder. The Court of Appeals (CA) reversed the RTC decision, declaring the dation in payment, real estate mortgage, and promissory notes valid and binding, finding that the spouses Surtida received the loan proceeds as evidenced by their signatures on the cashier's checks and executed the dation without protest. The CA denied their motion for reconsideration, and its decision became final and executory. The Petition: The spouses Surtida filed a Petition for Review on Certiorari with the Supreme Court, arguing that the CA decision was contrary to law and Supreme Court rulings, and that the trial court's findings on credibility and evidence should have prevailed.
Issue(s)
Whether the Supreme Court has appellate jurisdiction over the Court of Appeals' final and executory decision. Whether the Court of Appeals erred in reversing the Regional Trial Court's decision and upholding the validity of the promissory notes, real estate mortgage, and dations in payment.
Ruling
The petition is denied for lack of merit. The Supreme Court affirmed the Court of Appeals' decision, holding that the Court of Appeals' decision was already final and executory and therefore immutable. Even on the merits, the Court found no reversible error in the CA's ruling.
Ratio Decidendi
On the issue of appellate jurisdiction: The Supreme Court held that it had no appellate jurisdiction over the Court of Appeals' decision because it had already become final and executory. The Court emphasized the doctrine of immutability of judgments, stating that a final judgment may no longer be modified in any respect, even to correct erroneous conclusions of fact or law. This principle is founded on public policy and sound practice, ensuring that judgments become final at a definite point in time. The entry of judgment by the CA further solidified its finality, precluding any further review by the Supreme Court. Therefore, the petition was dismissed on procedural grounds due to the finality of the CA's decision. On the merits of the case: The Supreme Court found that the Court of Appeals did not err in reversing the RTC's decision. While acknowledging the general rule that trial court findings on facts and credibility are respected, the Supreme Court clarified that appellate courts are not precluded from reviewing and reversing these findings if not convinced by the evidence of record. The CA correctly noted that the spouses Surtida's claim of simulated contracts was belied by their actions, such as executing two dations in payment without protest and their belated protest only after receiving a summons in an unlawful detainer case. Furthermore, the CA gave due weight to the testimonial and documentary evidence, particularly the signatures of the spouses Surtida on the dorsal portions of the cashier's checks, which clearly indicated receipt of the loan proceeds. The Court also invoked the disputable presumptions under Section 3, Rule 131 of the Rules of Court, including the presumption that private transactions are fair and regular and that there was sufficient consideration for a contract. The spouses Surtida failed to overcome these presumptions by a preponderance of evidence, as their denial was bare, uncorroborated, and self-serving. The notarized dation in payment documents, coupled with the evidence of loan proceeds receipt, supported the CA's conclusion that the contracts were valid and binding.
Main Doctrine
A final and executory judgment is immutable and unalterable, even if it contains erroneous conclusions of fact or law. The presumption of sufficient consideration for a contract cannot be overthrown by bare, uncorroborated, and self-serving assertions of lack of consideration; it must be shown by a preponderance of evidence.