[ G.R. No.

234384, April 26, 2021 ]

ELISEO N. JOSEPH, PETITIONER, VS. SPOUSES JOSEFINA JOSEPH AND DANILO JOSEPH,
RESPONDENTS.

DECISION

LOPEZ, J., J.:

This is a Petition1 for Review on Certiorari under Rule 45 of the Revised Rules of Court seeking the
reversal of the Decision2 dated September 15, 2017 of the Court of Appeals (CA) in CA-GR. CV No.
105625, which affirmed with modification the Decision3 dated July 28, 2015 rendered by the
Regional Trial Court (RTC) Branch 172 of Valenzuela City in Civil Case No. 44-V-05, with the CA
decreeing that the unpaid purchase price of the subject property in the amount of P30,000.00 shall
earn interest at the rate of 12% per annum from May 20, 2005 until June 30, 2013, and 6% per
annum from July 1, 2013, until its full satisfaction; and that the moral damages and attorney's fees
shall earn interest at the rate of 6% per annum from the finality of the judgment until full satisfaction
thereof.

FACTS AND ANTECEDENT PROCEEDINGS

Respondents Spouses Josefina and Danilo Joseph (respondents) are the registered owners of a
parcel of land (subject property) situated in the Barrio of Balangcas, Valenzuela City, covered by
TCT No. V-46412, and measuring Two Hundred Twenty Five square meters (225 sq. m.) more or
less.4 On January 15, 2002, respondents and petitioner Eliseo Joseph (petitioner) entered into an
Agreement to Sell of the subject property in consideration of the sum of Two Hundred Twenty Five
Thousand Pesos (P225,000.00), with petitioner making a downpayment of One Hundred Thousand
Pesos (P100,000.00) upon the signing of the contract and the balance of One Hundred Twenty Five
Thousand Pesos (P125,000.00) shall be paid by petitioner within one year from and after the
execution of the contract.5

According to petitioner, he was able to fully pay the agreed consideration of the subject property.
Consequently, he demanded from respondents the execution of a deed of absolute sale in his favor,
which was however signed only by respondent Josefina Joseph while respondent Danilo Joseph
refused to sign the same unless petitioner pays an additional sum of money which is beyond the
price agreed upon by the parties in their contract to sell.6 After exerting earnest efforts for amicable
settlement, which proved futile, petitioner filed a complaint for specific performance and damages
dated February 23, 2005 against respondents praying that they be ordered to execute a final deed of
absolute sale concerning the subject property, in his favor.7

In their Answer with Compulsory Counterclaim,8 respondents claimed that in addition to the

purchase price of P225,000.00, the parties also agreed for petitioner to pay them an additional
amount of Eighty Thousand Pesos (P80,000.00), representing the value of the fence constructed by
respondents around the subject property and the filling materials therein, before a Deed of Absolute
Sale may be executed in favor of petitioner. After some negotiations, respondents agreed that
petitioner will only pay an additional sum of Thirty Thousand Pesos (P30,000.00) thus increasing the
purchase price of the property to P255,000.00, from the original contract price of P225,000.00. As
such, a Deed of Absolute Sale for the price of P255,000.00 was drafted with the agreement that the
balance of P30,000.00 will be paid by petitioner upon signing of the agreement. Respondents,
however, claimed that with the refusal of petitioner to pay the amount of P30,000.00 despite
repeated demands, their refusal to sign the Deed of Absolute Sale is justified.
After the parties filed their respective pleadings, due proceedings were conducted, and in a Decision
dated July 28, 2015, the RTC Branch 172 of Valenzuela City ruled in favor of
respondents,9 disposing the case as follows:

WHEREFORE, plaintiff is ordered to pay the defendants the unpaid additional purchase price of
Php30,000.00 within ten (10) days upon finality of this decision and for the defendants to execute the
deed of absolute sale immediately thereafter in favor of the plaintiff.

The plaintiff is further directed to pay the defendants the amount of Php50,000.00 as moral damages
and Php50,000.00 as attorney's fees and costs of litigation.

SO ORDERED.

Aggrieved, petitioner brought an appeal before the Court of Appeals, which was denied.

The CA found that the consideration of the sale of the subject property in the amount of P225,000.00
was increased by the parties to P255,000.00. Respondents10 repeatedly claimed that they entered
into an agreement with petitioner11 to increase the purchase price of the subject property by
P30,000.00, corresponding to the expenses incurred for the improvements made on the subject
property. Aside therefrom, the Deed of Absolute Sale prepared by petitioner and the letter of
demand he sent to respondents show that he explicitly claimed that he already paid in full the
purchase price of P255,000.00. Such fact was even admitted by him during his testimony in court.12

The CA also held that the Statute of Frauds is no longer applicable since the contract has already
been partially consummated. It found that the verbal amendment of the contract to sell, increasing
the purchase price of the subject property to P255,000.00, had already been partially executed
through the partial payments made by petitioner and received by respondents. Petitioner had, on
separate occasions, paid P100,000.00 to respondents and P125,000.00 to the bank. Thus, the
contract is no longer within the purview of the Statute of Frauds.13

In ruling that petitioner is liable to pay respondents a sum of money, the CA declared that petitioner
submitted receipts totaling P94,810.00. When added to the P100,000.00 downpayment, it would
appear that the purchase price was not paid in full. What is being disputed is that the remaining
P30,000.00 has already been paid by petitioner. Since no other evidence was offered to prove that
petitioner was able to pay in full the purchase price of P255,000.00, the CA concluded that the
remaining balance of P30,000.00 remains unsettled. As it was the petitioner who filed the complaint
against respondents before the RTC, it was incumbent upon him to prove full payment of the amount
of P255,000.00 by preponderance of evidence. This, he failed to do so.14

The CA likewise affirmed the award of moral damages and attorney's fees in favor of respondents
and modified the award of damages in accordance with the case of Nacar v. Gallery Frames,
ultimately disposing the case as follows:

WHEREFORE, premises considered, the Appeal is DENIED. The Decision dated July 28, 2015 of
the Regional Trial Court, Branch 172, Valenzuela City, in Civil Case No. 44-V-05 is AFFIRMED with
the Modification that the unpaid purchase price of the subject property in the amount of P30,000.00
shall earn interest at the rate of 12% per annum from May 30, 2005 until June 30, 2013, and 6% per
annum from July 1, 2013, until its full satisfaction; and that the moral damages and attorney's fees
shall earn interest at the rate of 6% per annum from the finality of the judgment until full satisfaction
thereof.
SO ORDERED.15

Aggrieved, petitioner brought the instant petition for review on certiorari under Rule 45 seeking to
reverse the CA Decision.

On the part of the respondents, after filing a series of extensions to file Comment, they were able to
file their Comment to the petition on June 27, 2018, echoing the CA Decision, principally arguing that
the very Deed of Absolute Sale which petitioner seeks to be signed by respondents states that the
consideration for the sale is P255,000.00. Likewise, the letter from petitioner's counsel admits that
the consideration for the sale is P255,000.00.16 Further, the testimony of petitioner during trial
showed that he admitted that there were improvements, although dilapidated, that were already
existing on the subject property when the parties agreed on its sale.17 Having no cause of action,
petitioner was not justified in bringing suit against respondents; thus, the award of moral damages,
attorney's fees and costs of suit was proper.18

ISSUES

The issues brought forth by petitioner are the following:

I.

Whether the Court of Appeals gravely erred in ruling that there was a subsequent agreement
between the parties increasing the consideration by Thirty Thousand Pesos, thus making him liable
therefor

II.

Whether the Court of Appeals gravely erred in ruling that petitioner is liable to pay respondents
moral damages, attorney's fees and costs of litigation

RULING

The petition lacks merit.

Rule 45 of the Revised Rules of Court provides a party with the remedy of filing a verified petition for
review before this Court when seeking to assail a judgment or final order or resolution of the Court of
Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law,
which petition shall raise only questions of law that must be distinctly set forth.19 Consistent
therewith, it has been held that it is not this Court's function to once again analyze or weigh evidence
that has already been considered in the lower courts.20

A question of law arises when there is doubt as to what the law is on a certain state of facts, while
there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a
question to be one of law, the same must not involve an examination of the probative value of the
evidence presented by the litigants or any of them. The resolution of the issue must rest solely on
what the law provides on the given set of circumstances. Once it is clear that the issue invites a
review of the evidence presented, the [question] posed is one of fact. Thus, the test of whether a
question is one of law or of fact is not the appellation given to such question by the party raising the
same; rather, it is whether the appellate court can determine the issue raised without reviewing or
evaluating the evidence, in which case, it is a question of law; otherwise, it is a question of fact.21
In the instant case, it is the amount of P30,000.00 as an additional amount to the consideration in
the sale of the subject property that is being contested by petitioner. As argued by petitioner, the
P30,000.00 increase of the consideration was not due to improvements (e.g. fencing and filling)
made thereon. Petitioner claims that except for the respondents' allegations, nothing in the records
would show that there were, in fact, improvements made after the execution of the Contract to Sell.
Petitioner averred that it is highly unlikely that after the respondents have already contracted to sell
the subject property to the petitioner, and with the latter actually paying for part of the consideration,
the former would subsequently, without the consent of petitioner, introduced improvements on the
subject property.22

Petitioner adds that the respondents never denied receipt of the letter of demand from the petitioner
asking for the execution of the Deed of Absolute Sale by reason of full payment. If he has not yet, in
fact, paid for the full price, then it would have been more in accordance with human nature and
experience for the respondents to have denied, in writing, full payment of the contract price and, at
the same time, to mention the increase of the contract price as a result of the alleged improvements.
However, this was not the case.23

All of the arguments raised by petitioner are factual in nature, which requires a re-examination of the
evidence presented during trial. The issue of whether full payment was indeed made by petitioner
requires the presentation of relevant and competent evidence to produce proof that would satisfy the
burden of proof that a party bears. This falls outside the ambit of a petition for review
on certiorari under Rule 45. Time and again, it has been held that the Supreme Court is not a trier of
facts. The function of the Court in petitions for review on certiorari under Rule 45 of the Rules of
Court is limited to reviewing errors of law that may have been committed by the lower courts. As a
matter of sound practice and procedure, the Court defers and accords finality to the factual findings
of trial courts. To do otherwise would defeat the very essence of Rule 45 and would convert the
Court into a trier of facts, which is not its intended purpose under the law.24

Nonetheless, there are recognized exceptions to the rule that petitions filed under Rule 45 shall only
be limited to questions of law, which are as follows:

(1) When the conclusion is a finding grounded entirely on speculation, surmises or

conjectures;

(2) When the inference made is manifestly mistaken, absurd or impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellant and appellee;

(7) The findings of the Court of Appeals are contrary to those of the trial court;

(8) When the findings of fact are conclusions without citation of specific evidence on which
they are based;
 (9) When the facts set forth in the petition as well as in the petitioner's main and reply briefs
are not disputed by the respondents; and

(10) The finding of fact of the Court of Appeals is premised on the supposed absence of
evidence and is contradicted by the evidence on record.

These exceptions similarly apply in petitions for review filed before this court involving civil, labor,
tax, or criminal cases.25

None of the exceptions apply to the case of petitioner. Rather than presenting arguments in support
of any of the aforementioned exceptions, petitioner harps on speculations, theorizing why
respondent Danilo did not want to sign the Deed of Absolute Sale. According to petitioner, the fact
that he has already fully paid the contract price was bolstered by the fact that respondent Josefina
had already signed the Deed of Absolute Sale on January 6, 2005. Petitioner claimed that it even
appears that respondent Danilo's refusal to sign was an afterthought to extort more money from him.
Petitioner also alleged that the increase in the price was due to the payment of mortgage on the
subject property he has made in excess of the contract price. In support thereof, petitioner averred
that the TCT introduced in evidence shows several annotations pertaining to previous mortgages on
the subject property cancelled by a subsequent mortgage obtained by the petitioner and his live-in
partner in 2004, the year the Deed of Absolute Sale appears to have been drafted.26

Explaining the motive behind the alleged non-performance of an obligation is not for this Court to
rule upon. These are matters for the trial court to consider based upon the appreciation of the
evidence presented by the parties. In any case, proceeding with the petition will not result in the
reversal of the assailed CA Decision.

The settled rule is that one who pleads payment has the burden of proving it. Even where the
creditor alleges non-payment, the general rule is that the onus rests on the debtor to prove payment,
rather than on the creditor to prove non-payment. The debtor has the burden of showing with legal
certainty that the obligation has been discharged by payment. Where the debtor introduces some
evidence of payment, the burden of going forward with the evidence – as distinct from the general
burden of proof – shifts to the creditor, who is then under a duty of producing some evidence to
show non-payment.27

In this case, petitioner is the debtor who pleads full payment of the purchase price of the subject
property. As such, it is he who carries the burden to prove his allegation of full payment. Whether the
increase of P30,000.00 was due to the improvements introduced by the respondents or due to the
payment of mortgage on the subject property, the trial court, as affirmed by the CA, already found,
based on the evidence presented by the parties that the total amount of the consideration in the sale
of the subject property is P255,000.00. Thus, it is the full payment of this amount which petitioner
must show, not the purpose for which the increase was attributed.  This, petitioner failed to do.
ℒαwρhi ৷

It bears noting that the Agreement to Sell28 dated January 15, 2002 which was entered into by the
parties, with an agreed price of P225,000.00 already amounted to a binding contract between them.
It is in the nature of a contract to sell, which is defined as "a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject property despite delivery
thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective
buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price." In a
contract to sell, "ownership is retained by the seller and is not to pass until the full payment of the
price x x x." It is "commonly entered into so as to protect the seller against a buyer who intends to
buy the property in installments by withholding ownership over the property until the buyer effects full
payment therefor."29
While a contract to sell operates as a preparatory contract to the execution of a written contract of
sale because of the condition for which the parties may agree on, it is already a contract in itself for
which a meeting of the minds already exists. The consent, object and consideration of the contract
are already present. Thus, the obligatory nature of a contract, which stresses the binding effect of
the terms agreed upon by the parties as having the force of law between them, which should be
complied with in good faith30 already becomes applicable. Nonetheless, considering the nature of a
contract to sell, which creates a period for the other party to comply with his/her obligation, there still
remains a room for negotiation with respect to the terms already agreed upon. Any change in the
terms of the agreement cannot however be unilaterally imposed by a single party; the same must be
mutually agreed upon by the parties. This is consistent with the characteristic of autonomy of
contracts, which allows the parties to establish such stipulations, clauses, terms and conditions as
they may deem appropriate provided only that they are not contrary to law, morals, good customs,
public order or public policy. The standard norm in the performance of their respective covenants in
the contract, as well as in the exercise of their rights thereunder, is expressed in the cardinal
principle that the parties in that juridical relation must act with justice, honesty and good faith.31

Maintaining the essence of a contract, which is the meeting of the minds of the parties, agreements
which may be subsequently entered into by the parties must be consensually agreed upon. As in this
case, the purchase price originally agreed upon at P225,000.00 was increased to P255,000.00 as
stated in the Deed of Absolute Sale. The Rules of Court recognizes the possibility that an agreement
already entered into by the parties may still undergo changes. The Parol Evidence Rule32 provides
an exception to the existence of other agreements entered into by the parties, to wit:

3. Parol Evidence Rule

Section 10. Evidence of written agreements. – When the terms of an agreement have been reduced
to writing, it is considered as containing all the terms agreed upon and there can be, as between the
parties and their successors in interest, no evidence of such terms other than the contents of the
written agreement.

However, a party may present evidence to modify, explain or add to the terms of the written
agreement if he or she puts in issue in a verified pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the
parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after
the execution of the written agreement.

The term "agreement" includes wills. (9a)

In this case, while the Deed of Absolute Sale did not specifically indicate that it amends the
Agreement to Sell that was first agreed upon by the parties, the same subject property, which is the
object of the two contracts were alluded to. Neither petitioner nor respondent even assailed the
purchase price that was in the Deed of Absolute Sale. As found by the Court of Appeals, the
evidence of petitioner, specifically the Deed of Sale and the demand letter indicates that the amount
of the subject property is P255,000.00.
It was, therefore, incumbent for petitioner to show proof that he fully paid this amount as
subsequently agreed upon by the parties, before asking the respondents to execute a Deed of
Absolute Sale and the delivery of the subject property to him. A contract of sale gives rise to a
reciprocal obligation of the parties. Reciprocal obligations are those which arise from the same
cause, and wherein each party is a debtor and a creditor of the other, such that the obligation of one
is dependent upon the obligation of the other. They are to be performed simultaneously, so that the
performance of one is conditioned upon the simultaneous fulfillment of the other.33 With his failure
to perform his obligation, petitioner cannot compel the respondents to comply with their obligation.

Anent the award of moral damages and attorney's fees, this Court resolves to delete the awards
bestowed upon the respondents.

The award of moral damages is proper when the following circumstances concur: (1) there is an
injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) there is a
culpable act or omission factually established; (3) the wrongful act or omission of the defendant is
the proximate cause of the injury sustained by the claimant; and (4) the award of damages is
predicated on any of the cases stated in Article 2219. This article provides:

Art. 2219. Moral damages may be recovered in the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article,
may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in
No. 9 of this article, in the order named.34

In awarding moral damages, the CA found that petitioner maliciously filed the complaint because he
knew that he had a pending payment before filing the case. The circumstances of the case
nonetheless show that petitioner believed that he had already fully paid the purchase price. While he
may have failed to present evidence to prove his allegations, this does not equate to bad faith.
Petitioner even attached to his pleadings, evidence demanding the execution of the Deed of
Absolute Sale with the amount of P255,000.00. Petitioner did not attempt to make any alteration in
the amount of the consideration that was subsequently agreed upon to make it appear that he
already made full payment. As held in Delos Santos v. Papa:35

x x x The award of moral damages is not a legal consequence that automatically followed. Moral
damages are only awarded if the basis therefor, as provided in the law quoted above, is duly
established. In the present case, the ground the respondents invoked and failed to establish is
malicious prosecution. Crystal v. Bank of the Philippine Islands is instructive on this point, as it tells
us that the law never intended to impose a penalty on the right to litigate so that the filing of an
unfounded suit does not automatically entitle the defendant to moral damages:

The spouses' complaint against BPI proved to be unfounded, but it does not automatically entitle BPI
to moral damages. Although the institution of a clearly unfounded civil suit can at times be a legal
justification for an award of attorney's fees, such filing, however, has almost invariably been held not
to be a ground for an award of moral damages. The rationale for the rule is that the law could not
have meant to impose a penalty on the right to litigate. Otherwise, moral damages must every time
be awarded in favor of the prevailing defendant against an unsuccessful plaintiff.

In the same vein, the award of attorney's fees must, likewise, be deleted. It is a rule that the award of
attorney's fees is the exception rather than the general rule, and "counsel's fees are not to be
awarded every time a party wins a suit. The discretion of the court to award attorney's fees under
Article 2208 of the Civil Code demands factual, legal, and equitable justification, without which the
award is a conclusion without a premise, its basis being improperly left to speculation and
conjecture. In all events, the court must state the reason for the award of attorney's fees." None of
the circumstances justifying an award of attorney's fees enumerated under Art. 2008 of the Civil
Code are present, or have been proven in this case.36

WHEREFORE, the instant petition is DENIED. The Decision dated September 15, 2017 of the Court
of Appeals in CA-G.R. CV No. 105625 is AFFIRMED with MODIFICATION hereby DELETING the
award of moral damages and attorney's fees in favor of respondents Spouses Josefina and Danilo
Joseph. Petitioner Eliseo Joseph shall pay the respondents Spouses Josefina and Danilo Joseph
the unpaid purchase price of the subject property in the amount of P30,000.00, which shall earn
interest at the rate of 12% per annum from May 30, 2005 until June 30, 2013, and 6% per
annum from July 1, 2013, until its full satisfaction.

SO ORDERED.

Leonen (Chairperson), Hernando, Inting, and Delos Santos, JJ., concur.