*
G.R. No. 104726. February 11, 1999.

VICTOR YAM & YEK SUN LENT, doing business under

the name and style of Philippine Printing Works,
petitioners, vs. THE COURT OF APPEALS and
MANPHIL INVESTMENT CORPORATION,
respondents.

Civil Law; Donations; Donation and acceptance of a

movable, the value of which exceeds P5,000.00, must be made in
writing, otherwise the same shall be void.—Art. 1270, par. 2 of
the Civil Code provides that express condonation must comply
with the forms of donation. Art. 748, par. 3 provides that the
donation and acceptance of a movable, the value of which
exceeds P5,000.00, must be made in writing, otherwise the
same shall be void. In this connection, under Art. 417, par. 1,
obligations, actually referring to credits, are considered movable
property. In the case at bar, it is undisputed that the alleged
agreement to condone P266,146.88 of the second IGLF loan was
not reduced in writing.

________________

* SECOND DIVISION.

2 SUPREME COURT REPORTS ANNOTATED

Yam vs. Court of Appeals

Same; Same; Condonation; The appointment of a receiver

operates to suspend the authority of a corporation and of its
directors and officers over its property and effects, such authority
being reposed in the receiver.—It is to be noted that the alleged
agreement to condone the amount in question was supposedly
entered into by the parties sometime in July 1986, that is, after
respondent corporation had been placed under receivership on
November 4, 1985. As held in Villanueva v. Court of Appeals
“the appointment of a receiver operates to suspend the
authority of a [corporation] and of its directors and officers over
its property and effects, such authority being reposed in the
receiver.” Thus, Sobrepeñas had no authority to condone the
debt.

Remedial Law; Appeals; It is settled that findings of fact of

trial courts, adopted and confirmed by the Court of Appeals, are
final and conclusive and, as a rule, will not be reviewed on
appeal.—The second assignment of error pertains to the
petitioners’ allegation that they did not receive the two letters
of demand sent by private respondent on September 4 and
September 25, 1986. Both the lower court and the Court of
Appeals found otherwise. We have no reason to disturb this
factual finding. It is settled that findings of fact of trial courts,
adopted and confirmed by the Court of Appeals, are final and
conclusive and, as a rule, will not be reviewed on appeal.

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

     Martin T. Menez and Noel S. Jose & Associates for
petitioners.
          Nepomuceno, Hofilena & Guingona for private
respondent.

MENDOZA, J.:
1
This is a petition for review of the decision of the Court
of Appeals affirming in toto the decision of the Regional
Trial

___________________

1 Per Justice Salome Montoya, Chairman, and concurred in by

Justices Eduardo Bengzon and Fortunato Vailoces.

3
 VOL. 303, FEBRUARY 11, 1999 3
Yam vs. Court of Appeals

Court of Manila (Branch 149), ordering petitioners to pay

private respondent the amount of P266,146.88 plus
interest, service charge, penalty fees, and attorney’s fees
and the costs, otherwise the chattel mortgage given to
secure payment of the loan would be foreclosed.
The following are the facts:
On May 10, 1979, the parties in this case entered into
a Loan Agreement with Assumption of Solidary Liability
whereby petitioners were given a loan of P500,000.00 by
private respondent. The contract provided for the
payment of 12% annual interest, 2% monthly penalty, 12
1/2% monthly service charge, and 10% attorney’s fees.
Denominated the first Industrial Guarantee and Loan
Fund (IGLF), the loan was secured by a chattel mortgage 3
on the printing machinery in petitioners’ establishment.
Petitioners subsequently obtained a second IGLF loan
of P300,000.00 evidenced by two promissory notes, dated
July 3, 1981 and September
4
30, 1981. For this purpose, a
new loan agreement was entered into by the parties
containing identical provisions as the first one, except as
to the annual interest which was increased to 14% and
the service charge which was reduced to 1% per annum.
The deed of 5 chattel mortgage was amended
correspondingly.
By April 2, 1985, petitioners had paid their first loan
of P500,000.00. On November 4, 1985, private respondent
was placed under receivership by the Central Bank and
Ricardo Lirio and Cristina Destajo were appointed as
receiver and inhouse examiner, respectively.
On May 17, 1986, petitioners made a partial payment
of P50,000.00 on the second loan. They later wrote
private respondent a letter, dated June 18, 1986,
proposing to settle their obligation. On July 2, 1986,
private respondent, through

_________________

2 Complaint, Exh. C; Records, pp. 6-16.

3 Id., Exh. D; id., pp. 17-24.
4 Plaintiffs’ Offer of Evidence, Exh. I; Records, pp. 223-228.
5 Id., Exh. D-1; id., pp. 229-231.
 4

4 SUPREME COURT REPORTS ANNOTATED

Yam vs. Court of Appeals

its counsel, replied with a counter-offer, namely, that it

would reduce the penalty charges up to P140,000.00,
provided petitioners
6
can pay their obligation on or before
July 30, 1986.
As of July 31, 1986, petitioners’ total liability to
private 7 respondent was P727,001.35, broken down as
follows:

Principal —P295,469.47
Interest —165,385.00
Penalties —254,820.55
Service Charges —11,326.33
TOTAL P727,001.35

On this date, petitioners paid P410,854.47 by means of a

Pilipinas Bank
8
check, receipt of which was acknowledged
by Destajo. The corresponding voucher for the check
bears the9
following notation: “full payment of IGLF
LOAN.”
The amount of P410,854.47 was the sum of the
principal (P295,469.47) and the interest (P165,385.00)
less the partial payment of P50,000.00. The private
respondent sent two demand letters to petitioners, dated
September 4, 1986 and September 25, 1986, seeking
payment of the balance of P266,146.88. As petitioners did
not respond, private respondent filed this case in the
Regional Trial Court of Metro Manila for the collection of
P266,146.88 plus interests, penalties, and service charges
or, in the alternative, for the foreclosure of the mortgaged
machineries.
In their Answer, petitioners claimed that they had
fully paid their obligation to private respondent. They
contended that some time after receiving private
respondent’s letter of July 2, 1986 (concerning the
conditional offer to reduce their penalty charges),
petitioner Victor Yam and his wife, Elena
_________________

6 Plaintiffs’ Formal Offer of Evidence, Exh. C; Records, p. 213.

7 Id., Exh. E-3; id., p. 217.
8 Defendant’s Formal Offer of Evidence, Exh. 5; Records, p. 399.
9 Id., Exhs. 4 & 4-A; id., p. 398.

VOL. 303, FEBRUARY 11, 1999 5

Yam vs. Court of Appeals

Yam, met with Carlos Sobrepeñas, president of

respondent corporation, during which the latter agreed to
waive the penalties and service charges, provided
petitioners paid the principal and interest, computed as
of July 31, 1986, less the earlier payment of P50,000.00.
This is the reason why according to them they only paid
P410,854.47. Petitioners added that this fact of full
payment is reflected in the voucher accompanying the
Pilipinas Bank check they issued, which bore the
notation “full payment of IGLF loan.”
On April 30, 1990, the lower court rendered a decision,
the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the defendants Victor

Yam and Yek Sun Lent are hereby ordered to pay jointly and
severally, the principal loan balance of P266,146.88 as of
September 4, 1986 plus interest at 14% per annum, service
charge at 1% per annum and penalty fees at 2% per month and
to pay plaintiff attorney’s fees equivalent to 10% of the amount
to be recovered, and to pay the costs of suit, failing in which, the
chattel mortgage instituted on the printing machineries and
equipment described in the Deed of Chattel Mortgage dated
May 10, 1979, as amended, is hereby declared foreclosed and
the subject thereof sold in accordance with law to satisfy the
judgment herein rendered.
10
SO ORDERED.

On appeal, the Court of Appeals affirmed the decision of

the trial court in toto. Hence, this petition. Petitioners
reiterate the same assignment of 11errors made by them
before the Court of Appeals, to wit:

FIRST ASSIGNED ERROR

THAT THE LOWER COURT GRIEVOUSLY ERRED IN
FAILING TO GIVE CREDENCE TO THE DOCUMENTARY
AS WELL AS TESTIMONIAL EVIDENCE OF THE
PETITIONERS RELATIVE TO THE PAYMENT TO THE
RESPONDENT OF THE ADDI-

__________________

10 Decision, pp. 13-14; Record, pp. 535-536.

11 Petition, p. 3; Rollo, p. 7.

6 SUPREME COURT REPORTS ANNOTATED

Yam vs. Court of Appeals

TIONAL LOAN UNDER THE AMENDMENT OF DEED OF

CHATTEL MORTGAGE (EXHIBIT K, RESPONDENT) AND
AS AGAINST THE TESTIMONY OF RESPONDENT’S
WITNESS, CRISTINA L. DESTAJO.

SECOND ASSIGNED ERROR

THAT THE COURT BELOW ERRED IN NOT TOTALLY

DISREGARDING EXHIBITS E AND F OF THE
RESPONDENTS.

The question is whether petitioners are liable for the

payment of the penalties and service charges on their
loan which, as of July 31, 1986, amounted to
P266,146.88.
The answer is in the affirmative. Art. 1270, par. 2 of
the Civil Code provides that express12 condonation must
comply with the forms of donation. Art. 748, par. 3
provides that the donation and acceptance of a movable,
the value of which exceeds P5,000.00, must be made in
writing, otherwise the same shall be void. In this
connection, under Art.
13
417, par. 1, obligations, actually
referring to credits, are considered movable property. In
the case at bar, it is undisputed that the alleged
agreement to condone P266,146.88 14
of the second IGLF
loan was not reduced in writing.
Nonetheless, petitioners insist that the voucher
covering the Pilipinas Bank check for P410,854.47,
containing the notation that the amount is in “full
payment of IGLF loan,” constitutes documentary
evidence of such oral agreement. This contention is
without merit. The notation in “full payment of IGLF
loan” merely states petitioners’ intention in making the
payment, but in no way does it bind private respondent.
It would have been a different matter if the notation
appeared in a receipt issued by respondent corporation,
through its receiver, because then it would be an
admission against interest. Indeed, if private respondent
really condoned

_________________

12 CIVIL CODE, Art. 1270, par. 2.

13 2 TOLENTINO, CIVIL CODE OF THE PHILIPPINES 25 (4th ed.,
1992).
14 TSN, pp. 9-14, Sept. 26, 1989.

VOL. 303, FEBRUARY 11, 1999 7

Yam vs. Court of Appeals

the amount in question, petitioners should have asked for

a certificate of full payment from respondent corporation,
as they did 15 in the case of their first IGLF loan of
P500,000.00.
Petitioners, however, contend that the Central Bank
examiner assigned to respondent corporation, Cristina
Destajo, signed the voucher in question. Destajo claimed
that, when she signed the voucher, she failed to notice
the statement that the amount of P410,854.47 was being
given in “full payment of IGLF Loan.” She said she
merely took note of16 the amount and the check number
indicated therein. In any event, Destajo, by
countersigning the voucher, did no more than
acknowledge receipt of the payment. She cannot be held
to have ascented thereby to the payment in full of
petitioners’ indebtedness to private respondent. It was
obvious she had no authority to condone any
indebtedness, her duties being limited to “issuing official
17
receipts, preparing check vouchers and documentation.”
Moreover, it is to be noted that the alleged agreement
to condone the amount in question was supposedly
entered into by the parties sometime in July 1986, that
is, after respondent corporation had been placed under
receivership on November
18
4, 1985. As held in Villanueva
v. Court of Appeals “the appointment of a receiver
operates to suspend the authority of a [corporation] and
of its directors and officers over its property and19effects,
such authority being reposed in the receiver.” Thus,
Sobrepeñas had no authority to condone the debt.
Indeed, Mrs. Yam herself testified that when she and
her husband sought the release of the chattel mortgage
over their property, they were told that only the Central
Bank would

___________________

15 Offer of Defendant’s Evidence, Exh. 1; Records, p. 395.

16 TSN, p. 42, Oct. 27, 1987.
17 TSN, p. 7, Aug. 11, 1987.
18 244 SCRA 395 (1995).
19 Id., p. 404 citing 65 Am. Jur. 2d Receivers, §146 [1963].

8 SUPREME COURT REPORTS ANNOTATED

Yam vs. Court of Appeals

20
authorize the same “because [the CB] is the receiver.”
Considering this, petitioners cannot feign ignorance and
plead good faith.
The second assignment of error pertains to the
petitioners’ allegation that they did not receive the two
letters of demand sent by private respondent on
September 4 and September 25, 1986. Both the lower
court and the Court of Appeals found otherwise. We have
no reason to disturb this factual finding. It is settled that
findings of fact of trial courts, adopted and confirmed by
the Court of Appeals, are final and21conclusive and, as a
rule, will not be reviewed on appeal.
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.

          Bellosillo (Chairman), Puno, Quisumbing and

Buena, JJ., concur.
 Judgment affirmed.

Notes.—A receiver is a person appointed by the court

in behalf of all the parties to the action for the purpose of
promoting and conserving the property in litigation and
preventing its possible destruction or dissipation, if it
were left in the possession of any of the parties.
(Commodities Storage & Ice Plant Corporation vs. Court
of Appeals, 274 SCRA 439 [1997])
The guiding principle in the appointment of a receiver
is the prevention of imminent danger to the property.
(Ibid.)

——o0o——

_______________

20 TSN, p. 24, July 31, 1989.

21 GSIS v. Court of Appeals, G.R. No. 128471, March 6, 1998.

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