Case Summary (G.R. No. 204289)
Facts of the Negotiated Sale
DBP invited negotiated bids on October 13, 2004, setting the purchase price at ₱1,326,000. Mancol, Jr. executed an SPA authorizing his father to negotiate and sign all documents. Mancol, Sr. paid an initial ₱265,200 (O.R. No. 3440018) and the balance of ₱1,060,800 (O.R. No. 3440451). A Deed of Absolute Sale was executed in petitioner’s favor, and Mancol, Jr. deposited ₱99,450 for capital gains tax (CGT) and documentary stamp tax (DST) (O.R. No. 3440537).
Verbal Undertakings and Breakdown
Petitioner alleges that DBP verbally agreed to effect transfer of title in his name and to eject occupants. In 2006 DBP returned all documents and issued a manager’s check for ₱99,450. Petitioner’s counsel demanded performance; DBP refused. BIR computed total CGT and DST with penalties at rising amounts (₱160,700.88 as of May 2006; ₱183,553.61 by March 2007). A proposal that petitioner pay taxes while DBP shoulder penalties was rejected.
Trial Court Pleadings and Counterclaims
On August 24, 2006, petitioner sued for breach of contract, seeking (a) enforcement of verbal undertakings, (b) payment of BIR charges and surcharges, (c) return of ₱99,450, (d) damages and attorney’s fees. DBP counter-claimed, arguing no written obligation to register the sale or eject occupiers, denied authorization to assume related expenses, and sought dismissal, ejectment suit costs, damages, and fees.
Regional Trial Court Proceedings
DBP was declared in default for failure to appear at pre‐trial. Petitioner presented witnesses Rodel Villanueva and Mancol, Sr., testifying to the alleged oral agreement. On April 14, 2008, the RTC ruled for petitioner, ordering DBP to return ₱99,450, pay BIR surcharges from June 12, 2005, and attorney’s fees of ₱15,000. DBP’s counterclaim was dismissed.
Reconsideration and Modified Orders
DBP’s motion for reconsideration was granted on June 13, 2008, dismissing petitioner’s complaint. Petitioner’s motion was denied on November 4, 2008, but the RTC modified its June 13 Order to direct DBP to return ₱99,450 with 6% interest from December 21, 2004. Further motions by DBP were denied on April 17, 2009.
Court of Appeals Decision
Both parties appealed to the CA. On February 22, 2012, the CA denied both appeals, affirmed the RTC’s orders of June 13 and November 4, 2008, and April 17, 2009, and equally apportioned costs. Motions for reconsideration were denied on September 27, 2012.
Issue on Appeal
Whether the testimonies of petitioner’s witnesses, Villanueva and Mancol, Sr., possess probative value to establish a contemporaneous oral agreement contradicting the written sale documents, and whether petitioner is entitled to additional damages and fees.
Applicable Law: Parol Evidence and Hearsay under the 1987 Constitution
Under the 1987 Constitution’s due process guarantees and the Revised Rules on Evidence:
- Written agreements are presumed complete; parol evidence may not add or contradict their terms except under Rule 130, Sec. 9 exceptions.
- A party waives parol‐evidence objections by failing to timely object.
- Admissibility of testimony depends on relevance and competence; weight depends on personal knowledge and credibility.
- Hearsay—testimony of facts known only through others
Case Syllabus (G.R. No. 204289)
Facts
- The Development Bank of the Philippines (DBP) offered for negotiated sale, by Invitation to Bid on October 13, 2004, a residential lot with a two-storey building in Calbayog City (TCT No. 2041), with a purchase price of ₱1,326,000.
- Petitioner Fernando Mancol, Jr. executed a Special Power of Attorney (SPA) in favor of his father Fernando Mancol, Sr., authorizing him “to represent and negotiate” the sale and “to sign or execute and receive any paper or document necessary” for that purpose.
- Mancol, Sr. signed the Negotiated Offer to Purchase and paid the initial ₱265,200 (O.R. No. 3440018) on October 13, 2004; petitioner later paid the balance of ₱1,060,800 (O.R. No. 3440451) on December 10, 2004.
- DBP executed a Deed of Absolute Sale in petitioner’s favor; petitioner deposited ₱99,450 for CGT and DST on December 21, 2004 (O.R. No. 3440537).
- Petitioner alleged that DBP verbally agreed to arrange transfer of title in his name (including payment of CGT) and to eject occupants from the property.
- In 2006 DBP returned all sale documents and issued Manager’s Check No. 0000956475 for ₱99,450, repudiating the alleged oral undertakings.
- Petitioner demanded compliance and returned the check; DBP replied it had no such obligations.
- BIR computation of CGT and DST reached ₱160,700.88 (later ₱183,553.61 by March 2007).
- On August 24, 2006 petitioner filed a complaint for breach of contract, damages, attorney’s fees, and return of ₱99,450; DBP counterclaimed, denying any obligation to register the sale or eject occupants and alleging petitioner’s failure to reimburse expenses.
- RTC Branch 31 of Calbayog City declared DBP in default for failure to appear at pre-trial; trial ensued with testimony from Rodel Villanueva and Mancol, Sr. concerning the alleged verbal agreement.
- On April 14, 2008 RTC ruled in petitioner’s favor: DBP to return ₱99,450, pay surcharges on CGT and DST from June 12, 2005, and attorney’s fees of ₱15,000; counterclaim dismissed.
- DBP’s motion for reconsideration was granted on June 13, 2008, dismissing petitioner