G.R. No.

104576

January 20, 1995

MARIANO L. DEL MUNDO, petitioner,

vs.
HON. COURT OF APPEALS, JOSE U. FRANCISCO and GENOVEVA V. ROSALES,
respondents.
VITUG, J.:
Mariano Del Mundo ("Del Mundo") impugns in this petition for review on certiorari the 07th April
1989 decision 1 of the Court of appeals which has affirmed, with modification, the 29th June 1984
decision 2 of the Regional Trial Court of Quezon City ordering him, together with the Republic
Planters bank ("RPB"), inter alia, to pay jointly and severally herein private respondents, the spouses
Jose Francisco and Genoveva Francisco ("Franciscos"), the sum of P200,000.00 by way of actual and
moral damages, as well as P6,000.00 of attorney's fees, plus litigation expenses.

3)
Ordering defendant Mariano L. Del Mundo to pay plaintiffs the sum of P42,000.00 as
reasonable rental payment for the use and occupancy of plaintiff's property, plus P15,000.00
representing the value of equipment taken by said defendant from plaintiffs; 16
When Del Mundo learned, for the first time, that a writ of execution pursuant to the appellate court's
decision was sought to be implemented against his property on 09 October 1990, he filed on the very
next day, or on 10 October 1990, an urgent manifestation with motion to lift the entry of judgment
against him alleging non-service of the assailed decision. 17 The appellate court acted favorably on
Del Mundo's motion and, "in the interest of justice," 18 he was also allowed to file his own for
reconsideration. He did in due time. 19
After Del Mundo's motion for reconsideration was denied on 18 March 1992, the present petition
was seasonably instituted assigning three alleged errors; viz:
A.

The Franciscos are the owners of a parcel of land, with an area of 38,010 square meters, situated in
Barrio Anilao, Municipality of Mabini, Province of Batangas, covered by and described in Original
Certificate of title ("OCT") No. 0-3267 of the Registry of deeds of Batangas. Del Mundo, on the
other hand, is the operator of a dive camp resort adjacent to the property.
Sometime in June of 1980, Del Mundo, on the other hand, is the operator of a dive camp resort
adjacent to the property.
Sometime in June of 1980, Del Mundo proposed a corporate joint venture with the Franciscos for the
development of the latter's property. The corporation (to be named the "Anilao Development
Corporation") would have a capital stock of One Million (P1,000,000.00) Pesos to be subscribed
equally between Del Mundo and the Franciscos. To cover the proposed subscription of the
Franciscos, Del Mundo assured the couple that he could get from them a P125,000.00 loan secured
by the realty. 3
The Franciscos executed a special power of attorney ("SPA"), dated 25 July 1980, 4 in favor of Del
Mundo authorizing him to obtain a bank loan. The SPA, in part, provided:
1.
To negotiate for a loan with any bank or financial institution, in such amount or amounts
as our said attorney-in-fact may deem proper and expedient and under such terms and conditions as
he may also deem proper and convenient;
2.
To sign, execute and deliver by way of first mortgage in favor of said bank or financial
institution on our property situated in Anilao, Mabini, Batangas, . . .
3.
To receive and receipt for the proceeds of the loan, and to sign such other papers and
documents as may be necessary in connection therewith;
GIVING AND GRANTING unto our said attorney-in-fact full power and authority as we might or
could do if personally present and acting in person, and hereby CONFIRMING all that our said
attorney-in-fact may lawfully do under and by virtue of these presents.
Only the duplicate copy of the SPA was given to Del Mundo by the Francisco. The latter kept the
original copy but agreed to have it delivered to Del Mundo once he would have been able to firm up
the P125,000.00 financing to cover their (the Franciscos) proposed subscription. 5 Aside from the
special power of attorney, the Franciscos, who were then about to depart for abroad, 6 turned over to
Del Mundo the physical possession of the real property along with its existing facilities and
equipment.
Del Mundo proceeded to the Republic Planters Bank ("RPB") to apply for the loan. After the loan
application was approved, Del Mundo executed a deed of real estate mortgage over the Franciscos'
property to secure a P265,000.00 loan. The mortgage, however, could not be annotated on the
owner's copy of OCT NO. 0-3267, then in the possession of the Development Bank of the
Philippines ("DBP") which had a previous mortgage lien on it. To obtain said owner's copy, the RPB
agreed to assume, and thereafter paid, Franciscos' outstanding indebtedness to the DBP. The latter,
despite the payment, refused to release the owner's copy of the certificate of title due to Franciscos'
objection. 7 In order to allow the release of the loan proceeds, Del Mundo submitted additional
collaterals. The RPB then withdrew its previous payment to the DBP of P22,621.75, and the
P265,000.00 loan was forthwith released to Del Mundo. 8
The joint venture did not materialize. The Franciscos wrote a demand letter addressed to Del Mundo
for the payment of rentals for the use of their property at the rate of P3,000.00 a month (totalling
P42,000.00) and for the return of the equipment taken by Del Mundo from the bodega of the
Franciscos valued at P15,000.00. 9
Since Del Mundo failed to settle with the Franciscos, the latter sued Del Mundo, along with the RPB,
for annulment of the mortgage, as well as for damages, before the Regional Trial Court of Quezon
City. The Franciscos asserted that Del Mundo made use of their property for his sole benefit and
purpose, and that the use of the property could not have been availed by Del Mundo himself had it
not been for the latter's proposal to put up the joint venture. After trial, the trial court rendered
judgment, dated 29 June 1984, 10 in favor of the Franciscos thusly:
(1)
Declaring the real estate mortgage (Exh. E) executed by defendant Mariano Del Mundo
in favor of defendant Republic Planters Bank on January 10, 1981, null and void ab initio;
(2)
Declaring the unauthorized payments made by defendant Republic Planters Bank to the
Development Bank of the Philippines for the account of plaintiffs as null and void;
(3)
Ordering defendant Mariano L. del Mundo to pay to plaintiffs the sum of P42,000.00 as
reasonable rental payment for the use and occupancy of plaintiffs' property, plus P15,000.00
representing the value of equipment taken by said defendant from plaintiffs;
(4)
Ordering defendants jointly and severally, to pay to plaintiffs the sum of P200,000.00 as
actual and moral damages, plus P6,000.00 as attorney's fees and litigation expenses, plus costs;
(5)
Ordering plaintiffs to reimburse defendant Republic Planters Bank the sum of
P67,000.00;
(6)

Dismissing defendants' counterclaims for lack of merit. 11

Both parties appealed the decision to the Court of Appeals. While the appeal was pending, Jose
Francisco died; he was substituted by his heirs. On 07 April 1989, the court of Appeals rendered its
now assailed decision 12 which decreed:
WHEREFORE, the appealed decision is hereby AFFIRMED in all respects subject to the
modification that plaintiff-appellants be absolved of any liability to appellant bank. 13
On its assumption that the decision had already become final and executory, the Court of Appeals
made an entry of judgment on 28 September 1989. 14 Thus, RPB, sometime in October 1990, paid
Genoveva Francisco and the substituted heirs the amount of P209,126.00, the extent to which RPB
was held to be jointly and solidarily liable with Del Mundo conformably with the appellate court's
decision (affirming that of the trial court). 15 The Franciscos acknowledged the payment and
manifested that "(t)he only amount not satisfied . . . (was) the amount due solely from defendant
Mariano L. Del Mundo" pursuant to that portion of the judgment

RESPONDENT C.A. ERRED IN AFFIRMING THE TRIAL COURT'S FINDING THAT PRIVATE
RESPONDENTS HAVE A CAUSE OF ACTION AGAINST PETITIONER DESPITE THE TOTAL
ABSENCE OF DAMAGE ON THE PART OF PRIVATE RESPONDENTS.
B.
RESPONDENT C.A. ERRED IN AFFIRMING THE TRIAL COURT'S DECISION DESPITE THE
FACT THAT SAID DECISION DOES NOT STATE THE FACTS AND THE LAW ON WHICH IT
IS BASED IN GROSS VIOLATION OF SEC. 9, X OF THE 1973 CONSTITUTION THEN IN
FORCE AND EFFECT.
C.
RESPONDENT C.A. ERRED IN AFFIRMING THE TRIAL COURT'S DECISION ORDERING
PETITIONER AND CO-DEFENDANT REPUBLIC PLANTERS BANK ("RPB") TO PAY
PRIVATE RESPONDENTS, JOINTLY AND SEVERALLY, THE SUM OF p200,000.00 AS
ACTUAL AND MORAL DAMAGES PLUS ATTORNEY'S FEES, AND COSTS/EXPENSES OF
LITIGATION.
We see partial merit in the petition.
In its 29th June 1984 decision, the trial court, after summarizing the conflicting asseverations of the
parties, went on to discuss, and forthwith to conclude on, the kernel issue of the case in just two
paragraphs, to wit:
The evidence disclose that defendant RPB executed said mortgage with del Mundo, although the
original of said special power-of-attorney and the original of the owner's duplicate certificate of title
was not presented to it and without requiring its registration. Under the circumstances, the mortgage
to defendant RPB was irregularity executed, justifying annulment of said mortgage in its favor.
However, the evidence disclose that plaintiffs has received the sum of P45,000.00 from del Mundo,
and the sum of P22,300.00 was paid to DBP (Exh. F) and applied to plaintiffs' previous loan with
DBP, as part of an agreement between plaintiffs and del Mundo, or a total of P67,300.00. Plaintiffs
are, therefore, duty bound to make reimbursement of said amount to RPB, as they cannot be allowed
to enrich themselves at RPB's expense and prejudice. 20
After that brief disquisition, the trial court disposed of the case by ordering Del Mundo and RPB,
inter alia, jointly and severally to pay the Franciscos the sum of P200,000.00 as actual and moral
damages, P6,000.00 as attorney's fees, and litigation expenses plus costs.
It is understandable that courts, with their heavy dockets and time constraints, often find themselves
with little to spare in the preparation of decisions to the extent most desirable. We have thus pointed
out that judges might learn to synthesize and to simplify their pronouncements. 21 Nevertheless,
concisely written such as they may be, decisions must still distinctly and clearly express, at least in
minimum essence, its factual and legal bases.
The two awards one for actual damages and the other for moral damages cannot be dealt
with in the aggregate; neither being kindred terms nor governed by a coincident set of rules,
each must be separately identified and independently justified. A requirement common to both,
of course, is that an injury must have been sustained by the claimant. The nature of that injury,
nonetheless, differs for while it is pecuniary in actual or compensatory damages, it is, upon the
other hand, non-pecuniary in the case of moral damages.
A party is entitled to an adequate compensation for such pecuniary loss actually suffered by
him as he has duly proved. Such damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of certainty. We have emphasized
that these damages cannot be presumed, and courts, in making an award must point out
specific facts which could afford a basis for measuring whatever compensatory or actual
damages are borne.
Moral damages, upon the other hand, may be awarded to compensate one for manifold injuries
such as physical suffering, mental anguish, serious anxiety, besmirched reputation, wounded
feelings and social humiliation. These damages must be understood to be in the concept of
grants, not punitive or corrective 30 in nature, calculated to compensate the claimant for the
injury suffered. 31 Although incapable of exactness and no proof of pecuniary loss is necessary
in order that moral damages may be awarded, the amount of indemnity being left to the
discretion of the court, it is imperative, nevertheless, that (1) injury must have been suffered
by the claimant, and (2) such injury must have sprung from any of the cases expressed in
Article 2219 and Article 2220 of the civil Code. A causal relation, in fine, must exist between
the act or omission referred to in the Code which underlies, or gives rise to, the case or
proceeding, on the one hand, and the resulting injury, on the other hand; i.e., the first must be
the proximate cause and the latter the direct consequence thereof.
A judicious review of the records in the case at bench, indeed, fails to show that substantial
legal basis was shown to support the herein questioned collective award for the questioned
damages. We are, therefore, constrained to disregard them.
As regards the other issues raised by petitioner, the findings of the appellate court, involving such as
they do mainly factual matters that are not entirely bereft of substantial basis, must be respected and
held binding on this Court.
In passing, we have taken note of the fact that the RPB, itself a judgment co-debtor in solidum with
Del Mundo, did not join the latter in this appeal. The Court, accordingly, cannot here and now make
any pronouncement on the effects of said bank's payment to Del Mundo under and by virtue of the
appellate court's appealed decision.
WHEREFORE, the decision of the Court of Appeals is accordingly MODIFIED by deleting the
award of P200,000.00 for actual and moral damages. In all other respects, the appealed decision is
AFFIRMED. No costs.
SO ORDERED