SPOUSES FEDERICO DEL ROSARIO AND PRESENTACION DEL ROSARIO, REPRESENTED BY THEIR ATTORNEY-IN-FACT ARVIN DEL ROSARIO, PLAINTIFFS-APPELLEES, V. SPOUSES MICHAEL FLORES AND AVA SHEIL…
ELBINIAS, J.:
dated May 31, 2012 of the Regional Trial Court (“lower court” for
brevity) of Lucena City, Branch 55 in Civil Case No. 2009-85 for
“Specific Performance with Damages”[3].
The pertinent facts are as follows:
On October 23, 2009, plaintiffs-appellees Spouses Federico Del
Rosario and Presentacion Del Rosario, who were represented by their
Attorney-in-Fact Arvin Del Rosario, (“plaintiffs-appellees” for brevity)
filed before the lower court, a Complaint[4] for “Specific Performance with Damages”[5] against defendants-appellants Spouses Michael Flores and Ava Sheila Flores (“defendants-appellants” for brevity).
The rest of the facts are those as stated in the lower court’s Decision[6] dated May 31, 2012, as follows:
“xxx defendant (defendant-appellant here) Ava Sheila
Flores is the niece of plaintiff (plaintiff-appellee here) Presentacion
del Rosario, the latter being the sister of Ava Sheila’s (defendant-appellant’s) mother. It being so, earnest efforts were exerted by the plaintiffs (plaintiffs-appellees here) to reach possible settlement before filing the case in court but failed. In the year 2004 while the plaintiffs (plaintiffs-appellees) were in Italy, defendant Michael Flores (defendant-appellant) tried to convince the plaintiffs (plaintiffs-appellees) through the phone to invest in the business dealing on computer services or something about Easybytes. Persuaded by Michael (defendant-appellant) that the business was good[,] the plaintiffs (plaintiffs-appellees) acceded to it. As agreed upon by them, Michael (defendant-appellant) sent to them in Italy [a] prepared Partnership contract xxx for their signature. Federico (plaintiff-appellee) signed
it and sent it back to Michael (defendant-appellant) in the Philippines
to have it notarized. And, as part of the agreement, plaintiffs (plaintiffs-appellees) sent to the defendants (defendants-appellants here) the total amount of P750,000.00 as their contribution to the business endeavor which, as pictured by Michael (defendant-appellant), was profitable. In the year 2006[,] plaintiffs (plaintiffs-appellees)
came home but to their dismay, they found out that there was no
partnership business to speak of, the partnership documents were not
processed and registered and the investment money they sent to the
defendants (defendants-appellants) were unaccounted for. Eventually, defendants (defendants-appellants) promised to pay back the same, reached an agreement and they executed a document, known as Kasunduan ng Bayaran xxx which was notarized by lawyer Calixto Dauz III. In the mentioned document[,] defendants (defendants-appellants)
undertook to pay their obligation within 3 years from 2007 up to 2009
but despite demands after the lapse of the period as promised,
defendants (defendants-appellants) failed to pay it. Thinking that the defendants (defendants-appellants) would not be able to pay their obligation to them plaintiffs (plaintiffs-appellees)
brought the matter to the Barangay Angeles Zone II in Tayabas, Quezon
for possible settlement. Nothing happened however[,] so plaintiffs (plaintiffs-appellees) are seeking for the payment of P750,000.00 plus interest from October, 2004 until it is fully paid. They (plaintiffs-appellees)
also pray for moral damages and payment for attorney’s fees and
appearance fees of their lawyer in the amount mentioned in the
complaint.”[7] (Emphasis Supplied)
On December 15, 2009, defendants-appellants filed their Answer with Counterclaim[8]. The rest of the facts are continued in the lower court’s Decision[9] dated May 31, 2012, to wit:
“xxx defendants (defendants-appellants) xxx did not deny that Michael Flores (defendant-appellant) called by phone the plaintiffs (plaintiffs-appellees) inviting the latter (plaintiffs-appellees) to engage in business which at that time was profitable. Michael (defendant-appellant) admitted that he (defendant-appellant) sent to the plaintiffs (plaintiffs-appellees) the Article of Partnership but with the instruction to have it authenticated before the Consul where the plaintiffs (plaintiffs-appellees) are residing. He (defendant-appellant) was informed by the plaintiffs (plaintiffs-appellees) that the authentication abroad was expensive. Hence, the signed but un-notarized document was returned to him (defendant-appellant).
And this is the reason why the document was not and could not be
notarized here in the Philippines. In their defense, defendants (defendant-appellant) claim
that the business venture entered into by the parties is a valid
partnership and being so the amount of P750,000.00 contributed by the
plaintiffs (plaintiffs-appellees) are to be considered partnership fund and when it incurred losses plaintiffs (plaintiffs-appellees) cannot personally recover the investment from the defendants. The business suffered losses, for which reason, defendant (defendant-appellant) cannot be compelled to return the amount contemplated in the complaint. Defendants (defendants-appellants) pray for the dismissal of the complaint, with cost, and for the payment of all sorts of damages and lawyer’s fees.”[10] (Emphasis Supplied)
On May 31, 2012, the lower court rendered its assailed Decision[11] in favor of plaintiffs-appellees. The dispositive portion of the lower court’s Decision read:
“WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against the defendants, ordering the
defendants to pay plaintiffs jointly and severally the following:1. P750,000.00 for the actual loss incurred by plaintiffs, plus
legal interest from the filing of the complaint on October 23, 2009
until they are fully paid;2. P100,000.00 for and as attorney’s fees;
3. P6,010.00 expenses for court filing fee, another P8,890.00
representing filing fee and P1,000.00, for trust fund and other expenses
with the total of P16,754.00 as reflected in the first page of the
records.Defendants counterclaim is dismissed.
SO ORDERED.”[12]
Defendants-appellants then filed the Appeal[13] at bench, praying that:
“WHEREFORE, premises considered, it is
respectfully prayed that the appealed decision be REVERSED and SET
ASIDE and the complaint for specific performance with damages be
dismissed.Other reliefs, just and equitable under the premises, are likewise prayed for.”[14] (Emphasis and Italics were made in the original)
Defendants-appellants raised the following assignment of errors:
“[I.]
THE LOWER COURT ERRED IN DECLARING THAT THE DEFENDANTS-APPELLANTS DEEMED TO HAVE WAIVED THEIR RIGHT TO PRESENT THEIR EVIDENCE.
II.
THE LOWER COURT ERRED IN RULING THAT THERE IS NO PARTNERSHIP CREATED BETWEEN THE PARTIES.
III.
THE LOWER COURT ERRED IN RULING THAT THE
DEFENDANTS-APPELLANTS ARE INDEBTED TO THE PLAINTIFFS-APPELLEES IN THE
AMOUNT OF SEVEN HUNDRED FIFTY THOUSAND PESOS (P750,000.00).”[15] (Emphasis was made in the original)
To begin with, contrary to defendants-appellants’ assigned error I, the lower court properly submitted the case for decision.
Defendants-appellants had argued as follows:
“It must be recalled that the defendants-appellants’ counsel has
withdrawn his representation during the trial. Since then,
defendant-appellant Michael has attended every scheduled hearing without
counsel’s representation. They had difficulty in securing the services
of a new counsel because of their financial condition. Unfortunately,
the trial court, without taking into account the foregoing
circumstances, considered the defendants-appellants to have waived their
right to present evidence. Considering the magnanimity of the amount
involved, the trial court should have made them aware of the
consequences [of] such waiver. If only measures were taken to allow them
to present their pieces of evidence, it could have been established
that there was indeed a joint business venture agreement of partnership
between the parties.In fact, the ten (10) Banco de Oro Checks for the account of
Easybytes Computer Ventures shows that Managing Partner Michael Flores
has been remitting shares of profits to plaintiffs-appellees. These
pieces of evidence, contrary to the plaintiffs-appellees’ assertion,
would prove that the parties have agreed to put up a partnership venture
and it was realized until it suffered losses. The original BDO checks
are hereto attached and marked as Appendix ‘B’. Besides, there are also
Equitable PCI Bank deposit slips and check vouchers which the
defendants-appellants deposited as remittances to the
plaintiffs-appellees. The original owner’s Equitable PCI bank deposit
receipt and the original copy of the check vouchers are hereto attached
and marked as Appendix ‘C’ and ‘D’, respectively. Moreover, the joint
business venture between the defendants-appellants and the
plaintiffs-appellees was materialized with a registered name business
name EASYBYTES COMPUTER VENTURE-LUCENA BRANCH.Although, these pieces of evidences were not formally offered in
evidence during the trial, the same may be considered on appeal in the
exercise of the Honorable Court’s sound discretion disregarding sheer
technicality that may overcome its sense of justice in considering the
merits of the case where there exists no doubt as to its veracity. xxx”[16]
Defeating defendants-appellants’ arguments however, is that
defendants-appellants were deemed to have waived their right to present
their evidence. As the records revealed, defendants-appellants were
given by the lower court several opportunites[17] to present their evidence. However, defendants-appellants chose not to submit any.
Moreover, as is the settled rule, a party’s failure to make a
formal offer of evidence within a considerable period of time shall be
deemed a waiver by such party to submit it.[18] This rule was declared by the Supreme Court in Heirs of Pedro Pasag, et al. vs. Sps. Lorenzo and Florentina Parocha, et al.,[19] as follows:
“The rule on formal offer of evidence is not a trivial
matter. Failure to make a formal offer within a considerable period of
time shall be deemed a waiver to submit it. Consequently, as in this case, any evidence that has not been offered shall be excluded and rejected.
xxx
The Rules of Court provides that ‘the court shall consider no evidence which has not been formally offered.’
A formal offer is necessary because judges are mandated to rest their
findings of facts and their judgment only and strictly upon the evidence
offered by the parties at the trial. Its function is to enable the
trial judge to know the purpose or purposes for which the proponent is
presenting the evidence. On the other hand, this allows opposing parties
to examine the evidence and object to its admissibility. Moreover, it
facilitates review as the appellate court will not be required to review
documents not previously scrutinized by the trial court.Strict adherence to the said rule is not a trivial matter. The Court in Constantino v. Court of Appeals ruled that the formal offer of one’s evidence is deemed waived after failing to submit it within a considerable period of time.
It explained that the court cannot admit an offer of evidence made
after a lapse of three (3) months because to do so would ‘condone an
inexcusable laxity if not non-compliance with a court order which, in
effect, would encourage needless delays and derail the speedy
administration of justice.’” (Emphasis Supplied)
Consequently, contrary to defendants-appellants’ assigned errors II and III,
defendants-appellants had failed to substantiate their allegation of
the existence of a partnership with plaintiffs-appellees.
On this matter, defendants-appellants had argued that:
“Defendants-appellants submit that the subject Seven Hundred
Fifty Thousand Pesos (P750,000.00) is a contribution by the
plaintiffs-appellees to the agreed partnership business.xxxxxx
In fact, the plaintiffs-appellees admitted in their complaint
that the foregoing amount is their contribution to finance the said
joint business venture. xxxxxx The Articles of Partnership, albeit not notarized, does not
detract from the fact that the herein plaintiffs-appellees and the
defendants-appellants have agreed to engage jointly into a business
undertaking. Mere failure to register the contract of partnership with
the Securities and Exchange Commission (SEC) does not invalidate a
contract that has the essential requisites of a partnership. The purpose
of registration of the contract is to give notice to third parties.
Failure to register the contract of partnership does not affect the
liability of the partnership and of the partners to third person.
Neither does such failure to register affect the partnership’s juridical
personality. A partnership may exist even if the partners do not use
the words ‘partner’ or ‘partnership’. xxxxxx Here, it is undisputable that defendant Michael was the
managing partner of the said joint venture and was putting his head to
run the business. Given the preceding facts, it is clear that the
disputants in this case had decided, from the very beginning, to engage
in a computer business, which they started and managed by the herein
defendants-appellants. Thus, any losses sustained thereat shall be borne
by all partners.”[20]
Trumping defendants-appellants’ arguments moreover, is that
plaintiffs-appellees were able to sufficiently show that
defendants-appellants had an obligation to pay the amount of
Php750,000.00 to plaintiffs-appellees. This, plaintiffs-appellees did by
their having presented in evidence the “Kasunduan ng Bayaran”[21] dated August 22, 2006, which stated the following:
“KASUNDUAN NG BAYARAN
ALAMIN NG LAHAT:
KAMI/AKO, MICHAEL FLORES kasal kay AVA SHEILA FLORES, xxx ay mayroong kasalukuyang utang na PITUNG DAANG LIBO AT LIMAMPU PISO (P750,000.00) kay FEDERICO DEL ROSARIO kasal kay PRESENTACION DEL ROSARIO xxx
Na aking/aming napagkasunduan na aking/aming babayaran ito sa
susunod na tatlong taon, mula sa taong 2007 hanggang taong 2009 na ang
pagbabasihan ay ang mga kita ng negosyo ng mag-asawa sa mga taon
nabanggit. Bilang paghahanda sa bayaring ito, hiniling namin sa kabilang
panig na bigyan kami ng tatlong taong extension sa pagbabayad, sa
kadahilanang kami/ako ay mayroon pa ring ibang mga kasabay na bayarin sa
kasalukuyan at ito ay hindi sasapat sa aming buwanang kitang mag-asawa
kung isasabay ito sa aming bayarin sa kasalukuyan. Sa kadahilanang ito,
aming napagkasunduan na ang nabanggit na halaga ay aming/aking babayaran
sa paraan paktaw-paktaw (staggered payment scheme) hanggang sa tuluyang
kami/ako MICHAEL FLORES ay makabayad sa buong halaga.”[22] (Emphasis was made in the original)
Given all these, no cogent or compelling reason was therefore
shown to justify any deviation from the following findings of the lower
court, which were in accordance with the facts and the law:
“There is no question that the plaintiffs (plaintiffs-appellees) sent to defendants (defendants-appellants) the
amount of P750,000.00 as investment in the partnership that the
defendants proposed to put up. In fact, the Articles of co-partnership
was signed both by plaintiff Federico del Rosario and Michael Flores. It
was not notarized however and also it was not registered in the
Securities and Exchange Commission (SEC). According to Article 1771 of
the Civil Code, a partnership may be constituted in any form. A
partnership is created by mere agreement of the parties (Article 1315)
and its existence commences from the moment of the execution of the
contract. However, according to the plaintiffs (plaintiffs-appellees)
they have an agreement with Michael to have the contract notarized and
registered in the government agency, which the latter failed to do so.
Besides, when the plaintiffs (plaintiffs-appellees) came home
in the Philippines they discovered that the partnership they expected
Michael to create never materialized. There was nothing to inventory nor
audit because the shop established by Michael does not show that it
belongs to them. Therefore, there being no valid and actual partnership
to speak of, it is only fair on part of the plaintiffs (plaintiffs-appellees) to recover their hard earned money from the defendants (defendants-appellants). In the process of getting back their money, the plaintiffs (plaintiffs-appellees) and defendants (defendants-appellants)
agreed on how to pay and settle the amount of P750,000.00. They
executed the contract known as ‘Kasunduan ng Bayaran’ dated August 22,
2006, converting the investment money into a loan of money which, in the
absence of any evidence to vitiate defendants’ consent, can be
considered valid contract.Considering that the defendants (defendants-appellants)
did not present any evidence to support their allegations that there
was in fact a partnership established by Michael Flores, the Court
analyzed defendants’ (defendants-appellants’) Answer to the
Complaint and their Pre-trial brief. It did not find any receipt,
document or any evidence purporting to show that plaintiffs have any
participation over ‘Easybytes Computer Ventures-Lucena Branch’. Michael
did not submit any evidence to show that he exerted any effort to have
the Articles of partnership notarized here in the Philippines for his
part and in Italy on the part of Federico. Defendants (defendants-appellants)
in their Answer relied their defense in Article 1768 of the Civil Code
to the effect that a partnership has a juridical personality separate
and distinct from that of each of the partners, even in case of failure
to comply with the requirements of Article 1772, first paragraph. But,
the provision refers only to a situation where third person is claiming
any liability from the partnership. It does not apply to actions between
or among the partners.As to the third issue, the Court finds defendants (defendants-appellants) liable for damages as prayed for by the plaintiffs (plaintiffs-appellees),
because, the defendants acted in gross and evident bad faith in
refusing to satisfy the plaintiffs’ valid, just and demandable claim.”[23] (Emphasis Supplied)
Indeed, the findings of the trial court are entitled to great
weight and respect on appeal, and are in fact accorded finality when
supported by sufficient evidence on the record[24], as in this case.
After careful consideration of all the facts, arguments, and
issues appearing on the records, as well as of the pertinent laws and
jurisprudence, and, in accordance with what is best determined to be
proper under the circumstances, the following disposition is therefore
made on these matters.
WHEREFORE, the Appeal is DENIED.
SO ORDERED.
Dicdican (Chairman) and Dimagiba,[*] JJ., concur.
[*] Acting Junior Member vice J. Paredes per Office Order No. 34-14-RSF dated January 30, 2014.
[1] Rollo, pp. 30-40
[2] Records, pp. 261-267
[3] Records, p. 2
[4] Records, pp. 2-10
[5] Records, p. 2
[6] Records, pp. 261-267
[7] Records, pp. 261-262
[8] Records, pp. 48-53
[9] Records, pp. 261-267
[10] Records, pp. 262-263
[11] Records, pp. 261-267
[12] Records, p. 267
[13] Rollo, pp. 30-40
[14] Rollo, p. 39
[15] Rollo, p. 32
[16] Rollo, pp. 36-37
[17] Records, pp. 248-249; p. 255; p. 258
[18] People of the
Philippines vs. Saturnino Villanueva, G.R. No. 181829, September 1,
2010; Westmont Investment Corporation vs. Amos P. Francia. Jr., et
al.,G.R. No. 194128, December 7, 2011
[19] G.R. No. 155483, April 27, 2007
[20] Rollo, pp. 37-39
[21] Records, p. 201
[22] Records, p. 201
[23] Records, pp. 265-267
[24] Spouses Patricio and Myrna Bernales vs. Heirs of Julian Sambaan, et al., G.R. No. 163271, January 15, 2010.