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DBP Vs CA Case Digest

The court ruled that while the deed of sale should be annulled, the respondent spouses still had to pay their loan obligation to DBP as the loan and sale were separate contracts. The court also ruled that DBP did not have to reimburse the spouses for taxes and survey expenses as the evidence provided was not sufficient to prove the amounts claimed.

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64 views2 pages

DBP Vs CA Case Digest

The court ruled that while the deed of sale should be annulled, the respondent spouses still had to pay their loan obligation to DBP as the loan and sale were separate contracts. The court also ruled that DBP did not have to reimburse the spouses for taxes and survey expenses as the evidence provided was not sufficient to prove the amounts claimed.

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Kris Pal
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G.R. No. 110053. October 16, 1995.

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner


vs.
COURT OF APPEALS, CELEBRADA MANGUBAT and ABNER
MANGUBAT, respondents

Narvasa, C.J., Puno, Mendoza and Francisco, JJ., concur.

DOCTRINE:

Contracts; If both parties have no fault or are not guilty, the restoration of
what was given by each of them to the other is consequently in order.

FACTS:

Development Bank of the Philippines (DBP) executed a "Deed of Absolute


Sale" in favor of respondent spouses Celebrada and Abner Mangubat over a parcel of
unregistered land. The land was originally owned by Presentacion Cordovez, who
donated it to Luciano Sarmiento in 1937.In 1964, Luciano Sarmiento sold the land to
Pacifico Chica.In 1965, Pacifico Chica mortgaged the land to DBP to secure a loan.

DBP acquired the property through an auction sale in 1970 and consolidated
its ownership. In 1980, respondent spouses offered to buy the property from DBP, and
a deed of absolute sale was executed in 1981.It was later discovered that the land was
classified as timberland and not subject to disposition. DBP approved a loan
application from the respondent spouses and released a substantial amount of the loan
to them. The remaining amount of the loan was not released due to the land not being
released by the Ministry of Natural Resources. Respondent spouses filed a complaint
against DBP, seeking the annulment of the deed of sale and reimbursement for taxes,
expenses for a relocation survey, and damages. The trial court ruled in favor of the
respondent spouses, annulling the deed of sale and ordering DBP to return the
purchase price, reimburse taxes and expenses, and pay damages, attorney's fees, and
litigation expenses. The Court of Appeals affirmed the ruling with modifications,
deleting the award for damages, attorney's fees, litigation expenses, and costs.

ISSUES:

(1) WON the respondent spouses should be ordered to pay their loan obligation to
DBP.
(2) WON DBP should reimburse the respondent spouses the purchase price of the
property and the amount for taxes and expenses for the relocation survey.

RULING:
(1) Yes, the respondent spouses should be ordered to pay their loan obligation to
DBP. The annulment of the sale does not affect the loan obligation between the
parties.
The respondent spouses should be ordered to pay their loan obligation to DBP.
In its legal context, the contract of loan executed between the parties is entirely
different and discrete from the deed of sale they entered into. The annulment of the
sale will not have an effect on the existence and demandability of the loan. One who
has received money as a loan is bound to pay to the creditor an equal amount of the
same kind and quality. The mortgage contract which embodies the terms and
conditions of the loan obligation of respondent spouses, as well as respondent
Celebrada Mangubat's admission in open court, are more than adequate evidence to
sustain petitioner's claim for payment of private respondents' aforestated indebtedness
and for the adjudication of DBP's claim therefor in the very same action now before
us.

(2) No, DBP should not reimburse the respondent spouses for the purchase price of
the property and the amount for taxes and expenses for the relocation survey.
Petitioner contends that the trial court and respondent Court of Appeals erred in
ordering the reimbursement of taxes and the cost of the relocation survey, there being
no factual or legal basis therefor. It argues that private respondents merely submitted a
"list of damages" allegedly incurred by them, and not official receipts of expenses for
taxes and said survey. Furthermore, the same list has allegedly not been identified or
even presented at any stage of the proceedings, since it was vigorously objected to by
DBP.

The list of damages was presented in the trial court and was correspondingly
marked as "Exhibit P." The said exhibit was, thereafter, admitted by the trial court but
only as part of the testimonial evidence for private respondents. However, despite that
admission of the said list of damages as evidence, we agree with petitioner that the
same cannot constitute sufficient legal basis for an award of P4,000.00 and P7,980.00
as reimbursement for land taxes and expenses for the relocation survey, respectively.
The list of damages was prepared extrajudicially by respondent spouses by
themselves without any supporting receipts as bases thereof or to substantiate the
same. In order that damages may be recovered, the best evidence obtainable by the
injured party must be presented. Actual or compensatory damages cannot be
presumed, but must be duly proved, and so proved with a reasonable degree of
certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact
and amount of damages, but must depend upon competent proof that they have been
suffered and on evidence of the actual amount thereof. If the proof is flimsy and
unsubstantial, no damages will be awarded.

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