Rural Bank of Guimba v. Abad
REITERATIONFacts
The Antecedents: Respondents Fermina S. Abad and Rafael Susan obtained a loan from petitioner New Rural Bank of Guimba (N.E.), Inc. for P4,050.00 on February 19, 1982, secured by a mortgage on their land. The mortgage was annotated on their Transfer Certificate of Title (TCT) No. NT-163716. The bank subsequently foreclosed the mortgage on January 6, 1987, with the bank as the highest bidder, leading to the issuance of a certificate of sale and later, an Affidavit of Consolidation of Ownership. A new title, TCT No. NR-20249, was issued in the bank's name, and an annotation regarding a Special Power of Attorney executed by Fermina Abad in favor of the bank was also added to the original title. Procedural History: On August 12, 1988, the respondent spouses filed a complaint with the Regional Trial Court (RTC) of Guimba, Nueva Ecija, seeking to declare their loan fully paid, nullify the foreclosure proceedings, the certificate of sale, the consolidation of ownership, and the new title issued to the bank, and to reinstate their original title. The RTC ruled in favor of the respondents, declaring the foreclosure and subsequent titles void and ordering the reinstatement of the respondents' title. The petitioner bank appealed this decision to the Court of Appeals, which affirmed the RTC's ruling. The bank's subsequent motion for reconsideration was denied. The Petition: Petitioner New Rural Bank of Guimba (N.E.), Inc. filed this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to overturn the decision of the Court of Appeals. The bank assigns as errors the appellate court's alleged misapplication of the concept of piercing the veil of corporate fiction, its mistaken consideration of certain circumstances as proof of payment, and its grave error in considering the delay in foreclosure as an indicia of falsity. The petition essentially asks the Supreme Court to re-examine the factual findings and the evidence presented in the lower courts regarding the payment of the loan.
Issue(s)
Whether the Court of Appeals gravely erred in misapplying the concept of piercing the veil of corporate fiction to rule that respondents' payments covered by receipts issued by Unifarm Rice and Unifarm Agro evidenced payment of their loan to petitioner. Whether the Court of Appeals was manifestly mistaken in considering certain circumstances as proof of payment to petitioner given that there was no basis for such consideration. Whether the Court of Appeals gravely erred in considering the delay in foreclosing the mortgage as an "indicia of the falsity" of petitioner's defense.
Ruling
The petition is denied. The Decision of the Court of Appeals and the Regional Trial Court are affirmed in toto.
Ratio Decidendi
On the alleged misapplication of piercing the veil of corporate fiction and mistaken consideration of circumstances as proof of payment: The Supreme Court reiterated the well-entrenched rule that findings of trial courts, especially when affirmed by the Court of Appeals, deserve respect and affirmation if supported by substantial evidence. The Court emphasized that a petition for certiorari under Rule 45 is limited to questions of law, not fact. It cannot adjudicate the truthfulness of payments by re-examining evidence adduced in the trial court. The Court found that the RTC's findings, supported by the phrase "full payment on the balance" on a receipt and the long interval between the loan's due date and the auction sale, were given credence over the bank's defense. The RTC also considered the educational disparity between the respondent and the bank's president. These are factual findings that the Supreme Court cannot disturb. On the alleged grave error in considering certain circumstances as proof of payment: The Supreme Court reiterated that its review under Rule 45 is confined to questions of law. The consideration of the delay in foreclosure as an indicia of falsity is a factual determination made by the lower courts. The Court cannot re-examine the probative value of evidence or the credibility of witnesses. The petition did not present significant issues involving questions of law that would warrant a departure from the established findings of fact by the RTC and CA. Therefore, the Supreme Court cannot give its imprimatur to this appeal based on this assignment of error. On the alleged grave error in considering the delay in foreclosure as an "indicia of the falsity" of petitioner's defense: The Supreme Court reiterated that its review under Rule 45 is confined to questions of law. The consideration of the delay in foreclosure as an indicia of falsity is a factual determination made by the lower courts. The Court cannot re-examine the probative value of evidence or the credibility of witnesses. The petition did not present significant issues involving questions of law that would warrant a departure from the established findings of fact by the RTC and CA. Therefore, the Supreme Court cannot give its imprimatur to this appeal based on this assignment of error.
Main Doctrine
The Supreme Court will not delve into the veracity of documentary and testimonial evidence, nor re-examine findings of fact made by the trial court and affirmed by the Court of Appeals, in a petition for certiorari under Rule 45, as such review is limited to questions of law.