Sazon v. Vasquez-Menancio
REITERATIONFacts
The Antecedents: This case originated from a Complaint for Recovery of Possession of Real Properties, Accounting, and Injunction filed by respondent Leticia Vasquez-Menancio against petitioner Caridad S. Sazon. Respondent, a resident of the United States, had entrusted the management and administration of several properties in Albay, Philippines, to petitioner in 1979. These properties included residential lots and agricultural lands such as ricelands and coconut lands. Respondent alleged that petitioner collected and received all fruits and income from these properties but failed to render a full accounting, instead appropriating them for her own benefit. Petitioner, conversely, claimed that some properties did not generate income, and any income was insufficient to cover maintenance expenses. She also presented letters as proof of accounting and denied receiving demands for an accounting or remittance. Procedural History: The Regional Trial Court (RTC) initially ruled in favor of the respondent. However, upon petitioner's Motion for Reconsideration (MR), the RTC reversed its decision. Respondent appealed to the Court of Appeals (CA), which affirmed the RTC's initial decision. Respondent's subsequent MR was denied by the CA. The CA's decision was then modified to order petitioner to pay respondent ₱908,112.62 for unremitted fruits and income, net of administration expenses. Petitioner's MR to the CA was denied. The case reached the Supreme Court via a Petition for Review under Rule 45. The Petition: Petitioner filed a Petition for Review under Rule 45 of the Rules of Court, assailing the CA's decision. Petitioner raised several arguments, including a procedural issue regarding the CA's power to affirm the RTC's modified decision after the trial court had reversed its original ruling. She also contested the CA's findings on the turnover of property possession, particularly concerning leased lots and a portion of Lot IV. Furthermore, petitioner challenged the CA's conclusion that her submitted letters were insufficient as an accounting and disputed the factual findings regarding the ownership of Lots V and VI. The core of the petition revolved around the determination of the value of fruits and proceeds collected from the properties between 1979 and 1997, and the proper calculation of expenses and compensation.
Issue(s)
Whether the Court of Appeals erred in affirming the Regional Trial Court's second Decision after the trial court had reversed its initial ruling. Whether petitioner can be compelled to turn over possession of properties under valid lease agreements. Whether petitioner is liable for the fruits and income derived from the properties administered by her, including the proper accounting for an 18-year administration and the ownership of Lots V and VI. Whether the computation of unremitted fruits and income by the Court of Appeals was proper, considering the evidence presented and the certifications from government agencies, and whether the case should be remanded for proper determination. Whether petitioner is entitled to compensation for her services as administrator, and the appropriate method for determining such compensation.
Ruling
The Petition is PARTLY GRANTED. The case is REMANDED to the Regional Trial Court of Ligao City, Albay, for further proceedings to determine the exact amounts of income and expenses, and to render a final accounting. The Supreme Court ordered the turnover of possession of certain properties and clarified the entitlement to compensation.
Ratio Decidendi
On the appellate court's power to review: The Supreme Court affirmed that when a case is appealed, the appellate court has the power to review the case in its entirety and can affirm, reverse, or modify the appealed decision. The CA was therefore free to affirm, reverse, or modify either the Decision or the Order of the RTC, as it did not violate its power of review. On the turnover of properties under lease: The Court agreed with the CA that even though the lease agreements covering Lots I-III should be respected, petitioner must turn over the administration of these leases to respondent's attorney-in-fact. This is because respondent had already revoked petitioner's authority as administrator, and thus petitioner no longer had the right to administer the properties or receive income on respondent's behalf. On liability for fruits and income: The Court found that petitioner, as an agent, was bound to render an account of her transactions and deliver to the principal whatever she received by virtue of the agency. The Court found the four letters submitted by petitioner as insufficient accounting for an 18-year administration. The Court also upheld the lower courts' findings regarding Lots V and VI, stating that petitioner's mother purchased these lots in her capacity as respondent's attorney-in-fact, thus the fruits and profits should accrue to respondent. On the computation of unremitted fruits and income: The Supreme Court disagreed with the CA's computation, finding it erroneous to base it solely on the self-serving evidence of respondent's attorney-in-fact. The Court emphasized that certifications from the National Food Authority (NFA) and Philippine Coconut Authority (PCA) regarding prevailing prices should have been given weight. Due to the lack of evidence on the exact quantity and quality of harvests and the breakdown of the monetary awards, the case was remanded for proper determination. On compensation for services: The Court reiterated that petitioner is entitled to compensation for her services under the principle of quantum meruit, as no exact amount was agreed upon and she failed to fix her own salary. The RTC's determination of ₱1,000 per month for 15 years as just and reasonable compensation was upheld. This amount was ordered to be added to the deductibles petitioner could prove or to whatever respondent might owe petitioner after accounting.
Main Doctrine
An agent is bound to render an account of transactions and deliver to the principal whatever has been received by virtue of the agency, even though it may not be owing to the principal. A stipulation exempting the agent from this obligation is void. The failure to render a full accounting is a breach of the agency agreement, regardless of the reason for the failure.