Santos vs. Reyes, 368 SCRA 261(2001)

7/25/2019 Santos vs. Reyes, 368 SCRA 261(2001)

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Santos vs. Reyes, 368 SCRA 261(2001)

Remedial Law; Appeals; Factual findings of the Court of Appeals affirming those of the trial court arebinding and conclusive on the Supreme Court.Petitioner has utterl failed to demonstrate wh a reviewof these factual findings is warranted. !ell"entrenched is the basic rule that factual findings of the Courtof Appeals affirming those of the trial court are binding and conclusive on the Supreme Court. Althoughthere are e#ceptions to this rule$ petitioner has not satisfactoril shown that an of them is applicable tothis issue.

Same; Same; !hen the %udgment of the Court of Appeals is premised on a misapprehension of facts or afailure to notice certain relevant facts that would otherwise %ustif a different conclusion$ a review of itsfactual findings ma be conducted.!hen the %udgment of the CA is premised on a misapprehension offacts or a failure to notice certain relevant facts that would otherwise %ustif a different conclusion$ as inthis particular issue$ a review of its factual findings ma be conducted$ as an e#ception to the general ruleapplied to the first two issues.

Republic of the PhilippinesSUPREME COURT

&anila'()R* *)+)S),-

G.R. No. 13813 O!to"e# 2, 2001$ERNAN%O SANTOS,petitioner$vs.

SPOUSES ARSEN&O an' N&EES REES,respondents.PANGAN&*AN, J.+

As a general rule$ the factual findings of the Court of Appeals affirming those of the trial court are bindingon the Supreme Court. (owever$ there are several e#ceptions to this principle. )n the present case$ we findoccasion to appl both the rule and one of the e#ceptions.

The Case

efore us is a Petition for Review on Certiorari assailing the -ovember /0$ 1223 *ecision$1as well as the

August 13$ 1220 and the ,ctober 2$ 1220 Resolutions$/issued b the Court of Appeals 4CA5 in CA"6R C+-o. 7838/. 'he Assailed *ecision disposed as follows9

:!(RF,R$ the decision appealed from is AFF)R&* save as for the counterclaim which ishereb *)S&)SS*. Costs against s &otion for Reconsideration$ the August 13$ 1220 Resolution ruled asfollows9

:!(RF,R$ = motion for reconsideration is 6RA-'*. Accordingl$ the court>sdecision dated -ovember /0$ 1223 is hereb &,*)F)* in that the decision appealed from is

AFF)R&* in toto$ with costs against


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:Sometime in Bune$ 120$ 1@> to >1@"**********>5 to conve to


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: capacit as boo??eeper$ she received all pamentsfrom which -ieves deducted 6ragera>s commission. 'he commission would then be remitted to6ragera. She li?ewise determined loan releases.

:*uring the pre"trial$ the parties narrowed the issues to the following points9 whether


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72.7.1. P/$022$372.@E " 'he balance of the 1@ percent share of the s fees; and

72.8./. 'he cost of the suit.:0

Ruling of the Court of Appeals

,n appeal$ the *ecision of the trial court was upheld$ and the counterclaim of respondents was dismissed.Gpon the latter>s &otion for Reconsideration$ however$ the trial court>s *ecision was reinstated in toto.SubseHuentl$ petitioner>s own &otion for Reconsideration was denied in the CA Resolution of ,ctober 2$1220.

'he CA ruled that the following circumstances indicated the e#istence of a partnership among the parties9415 it was -ieves who broached to petitioner the idea of starting a mone"lending business and introducedhim to 6ragera; 4/5 Arsenio received :dividends: or :profit"shares: covering the period Bul 1@ to August3$ 120 4#h. ::5; and 475 the partnership contract was e#ecuted after the Agreement with 6ragera andpetitioner and thus showed the parties> intention to consider it as a transaction of the partnership. )n theircommon venture$ petitioner invested capital while respondents contributed industr or services$ with theintention of sharing in the profits of the business.

'he CA disbelieved petitioner>s claim that -ieves had misappropriated a total of P/EE$EEE which wassupposed to be delivered to 6ragera to cover unpaid commissions. )t was his tas? to collect the amountsdue$ while hers was merel to prepare the dail cash flow reports 4#hs. :1@"1@**********:5 to ?eeptrac? of his collections.

(ence$ this Petition.2

Issue


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Petitioner as?s this Court to rule on the following issues91E

:!hether or not Respondent Court of Appeals acted with grave abuse of discretion tantamount toe#cess or lac? of %urisdiction in9

1. (olding that private respondents were partnersJ%oint venturers and not emploees of Santos in

connection with the agreement between Santos and &onte &ariaJ6ragera;

/. Affirming the findings of the trial court that the phrase >Received b> on documents signed b-ieves Rees signified receipt of copies of the documents and not of the sums shown thereon;

7. Affirming that the signature of -ieves Rees on #hibit >> was a forger;

8. Finding that #hibit >(> counterclaim;

3. *ening Santos> motion for reconsideration dated September 11$ 1220.:

Succinctl put$ the following were the issues raised b petitioner9 415 whether the parties> relationship wasone of partnership or of emploer emploee; 4/5 whether -ieves misappropriated the sums of moneallegedl entrusted to her for deliver to 6ragera as his commissions; and 475 whether respondents wereentitled to the partnership profits as determined b the trial court.

The Court's Ruling

'he Petition is partl meritorious.

First Issue:Business Relationship

Petitioner maintains that he emploed the services of respondent spouses in the mone"lending venturewith 6ragera$ with -ieves as boo??eeper and Arsenio as credit investigator. 'hat -ieves introduced6ragera to Santos did not ma?e her a partner. She was onl a witness to the Agreement between the two.Separate from the partnership between petitioner and 6ragera was that which e#isted among petitioner$-ieves and Dabat$ a partnership that was dissolved when Dabat was e#pelled.

,n the other hand$ both the CA and the trial court re%ected petitioner>s contentions and ruled that thebusiness relationship was one of partnership. !e Huote from the CA *ecision$ as follows9

:


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business of the partnership without undergoing the procedure relative to dissolution. )nstead$the invited Arsenio to participate as a partner in their operations. 'here was therefore$ no intentto dissolve the earlier partnership. 'he partnership between s share. 17'his stipulation

clearl proved the establishment of a partnership.

!e find no cogent reason to disagree with the lower courts that the partnership continued lending moneto the members of the &onte &aria Communit *evelopment 6roup$ )nc.$ which later on changed its

business name to Private Association for Communit *evelopment$ )nc. 4PAC*)5. -ieves was not merelpetitioner>s emploee. She discharged her boo??eeping duties in accordance with paragraphs / and 7 ofthe Agreement$ which states as follows9

:/. 'hat the SC,-* PAR'I and '()R* PAR'I shall handle the solicitation and screening ofprospective borrowers$ and shall # # # each be responsible in handling the collection of the loanpaments of the borrowers that the each solicited.

:7. 'hat the boo??eeping and dail balancing of account of the business operation shall be

handled b the SC,-* PAR'I.:18

'he :Second Part: named in the Agreement was none other than -ieves Rees. ,n the other hand$Arsenio>s duties as credit investigator are subsumed under the phrase :screening of prospectiveborrowers.: ecause of this Agreement and the disbursement of monthl :allowances: and :profit shares:or :dividends: 4#h. ::5 to Arsenio$ we uphold the factual finding of both courts that he replaced Dabat inthe partnership.

)ndeed$ the partnership was established to engage in a mone"lending business$ despite the fact that itwas formalied onl after the &emorandum of Agreement had been signed b petitioner and 6ragera.Contrar to petitioner>s contention$ there is no evidence to show that a different business venture isreferred to in this Agreement$ which was e#ecuted on August $ 120$ or about a month after the&emorandum had been signed b petitioner and 6ragera on Bul 18$ 120. 'he Agreement itself attests to

this fact9

:!(RAS$ the parties have decided to formalie the terms of their business relationship inorder that their respective interests ma be properl defined and established for their mutual

benefit and understanding.:1@

Second Issue:No Proof of Misappropriation of Gragera's npaid Co!!ission


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Petitioner faults the CA finding that -ieves did not misappropriate mone intended for 6ragera>scommission. According to him$ 6ragera remitted his dail collection to -ieves. 'his is shown b #hibit:.: 4the :Schedule of *ail Paments:5$ which bears her signature under the words :received b.: For theperiod Bul 120 to &arch 1203$ 6ragera should have earned a total commission of P8$/0/$8/2.7E.(owever$ onl P7$E0$177./E was received b him. 'hus$ petitioner infers that she misappropriated thedifference of P1$/18$/2.1E$ which represented the unpaid commissions. #hibit :(.: is an untitledtabulation which$ according to him$ shows that 6ragera was also entitled to a commission of P/EE$EEE$an amount that was never delivered b -ieves.1

,n this point$ the CA ruled that #hibits :$: :F$: :: and :(: did not show that -ieves received fordeliver to 6ragera an amount from which the P1$/18$/2.1E unpaid commission was supposed to come$and that such e#hibits were insufficient proof that she had embeled P/EE$EEE. Said the CA9

:'he presentation of #hibit :*: vaguel denominated as >members ledger> does not clearlestablish that -ieves received amounts from &onte &aria>s members. 'he document does notclearl state what amounts the entries thereon represent. &ore importantl$ -ieves made theentries for the limited period of Banuar 11$ 1203 to Februar 13$ 1203 onl while the rest weremade b 6ragera>s own staff.

:-either can we give probative value to #hibit >> which allegedl shows ac?nowledgment of theremittance of commissions to +erona 6onales. 'he document is a private one and its duee#ecution and authenticit have not been dul proved as reHuired in SC'),- /E. Proof of Pri"ate #ocu!ent efore an private document offered asauthentic is received in evidence$ its due e#ecution and authenticit must be provedeither9

4a5 anone who saw the document e#ecuted or written; or

4b5 evidence of the genuineness of the signature or handwriting of the ma?er.

>An other private document need onl be identified as that which it is claimed to be.>

:'he court a $uoeven ruled that the signature thereon was a forger$ as it found that9

># # # . ut -)+S denied that #h. "1 is her signature; she claimed that it is a forger.'he initial stro?e of #h. "1 starts from up and goes downward. 'he initial stro?e of thegenuine signatures of -)+S 4#hs. A"7$ "1$ F"1$ among others5 starts from below andgoes upward. 'his difference in the start of the initial stro?e of the signatures #hs. "1and of the genuine signatures lends credence to -ieves> claim that the signature #h. "1is a forger.>

### ### ###

:-ieves> testimon that the schedules of dail pament 4#hs. >> and >F>5 were based on thepredetermined 1EE collection as guaranteed b 6ragera is credible and clearl in accord withthe evidence. A perusal of #hs. :: and :F: as well as #hs. >1@> to 1@"**********> revealthat the entries were indeed based on the 1EE assumptive collection guaranteed b 6ragera.'hus$ the total amount recorded on #h. >> is e#actl the number of borrowers multiplied b thepro%ected collection of [email protected] per borrower. 'his holds true for #h. >F.>


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:Corollaril$ -ieves> e#planation that the documents werepro for!aand that she signed themnot to signif that she collected the amounts but that she received the documents themselves ismore believable than s= assertion that she actuall handled the amounts.

:Contrar to s= assertion$ #hibit >(> does not uneHuivocall establish that # # # -ievesreceived P/EE$EEE.EE as commission for 6ragera. As correctl stated b the court a $uo$ the

document showed a liHuidation ofP%&( and not P/EE$EEE.EE.

:Accordingl$ we find -ieves> testimon that after August /E$ 120$ all collections were made b6ragera believable and worth of credence. Since 6ragera guaranteed a dail 1EE pament ofthe loans$ he too? charge of the collections. As s= representative$

-ieves merel prepared the dail cash flow reports 4#h. >1@> to >1@ **********>5 to enables operations. 6ragera on the other hand devised the scheduleof dail pament 4#hs. >> and >F>5 to record the pro%ected gross dail collections.

:As aptl observed b the court a $uo9

>/.1. As between the versions of SA-',S and -)+S on how the commissions of

6RA6RA s ruling$ which we Huote below9

:/1. #h. ( does not prove that SA-',S gave to -)+S and the latter received P/EE$EEE.EE for deliver to6RA6RA. #h. ( shows under its si#th column >A**)'),-AL CAS(> that the additional cash wasP/8E$EEE.EE. )f #h. ( were the liHuidation of the P/EE$EEE.EE as alleged b SA-',S$ then his claim isnot true. 'his is so because it is a liHuidation of the sum of P/8E$EEE.EE.

:/1.1. SA-',S claimed that he learned of -)+S> failure to give the P/EE$EEE.EE to 6RA6RA when hereceived the latter>s letter complaining of its delaed release. Assuming as true SA-',S> claim that he gaveP/EE$EEE.EE to 6RA6RA$ there is no competent evidence that -)+S did not give it to 6RA6RA. 'heonl proof that -)+S did not give it is the letter. ut SA-',S did not even present the letter in evidence.(e did not e#plain wh he did not.

:/1./. 'he evidence shows that all mone transactions of the mone"lending business of SA-',S werecovered b pett cash vouchers. )t is therefore strange wh SA-',S did not present an voucher or receiptcovering the P/EE$EEE.EE.:10

)n sum$ the lower courts found it unbelievable that -ieves had embeled P1$@@@$E0.3E from thepartnership. She did not remit P1$/18$/2.1E to 6ragera$ because he had deducted his commissions beforeremitting his collections. #hibits :: and :F: are merel computations of what 6ragera should collect forthe da; the do not show that -ieves received the amounts stated therein. -either is there sufficient

proof that she misappropriated P/EE$EEE$ because #hibit :(.: does not indicate that such amount wasreceived b her; in fact$ it shows a different figure.

Petitioner has utterl failed to demonstrate wh a review of these factual findings is warranted. !ell"entrenched is the basic rule that factual findings of the Court of Appeals affirming those of the trial courtare binding and conclusive on the Supreme Court. 12Although there are e#ceptions to this rule$ petitionerhas not satisfactoril shown that an of them is applicable to this issue.


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Third Issue:Accounting of Partnership

Petitioner refuses an liabilit for respondents> claims on the profits of the partnership. (e maintains that:both business propositions were flops$: as his investments were :consumed and eaten up b thecommissions orchestrated to be due 6ragera: a situation that :could not have been rendered possible

without complicit between -ieves and 6ragera.:

Respondent spouses$ on the other hand$ postulate that petitioner instituted the action below to avoidpament of the demands of -ieves$ because sometime in &arch 1203$ she :signified to petitioner that it

was about time to get her share of the profits which had alread accumulated to some P7 million.:Respondents add that while the partnership has not declared dividends or liHuidated its earnings$ theprofits are alread reflected on paper. 'o prove the counterclaim of -ieves$ the spouses show that fromBune 17$ 120 up to April 12$ 1203$ the profit totaled P/E$8/2$@/E 4#hs. :1E: et seH. and :1@: et seH.5.ased on that income$ her 1@ percent share under the %oint venture amounts to P7$E8$8/0 4#h. :1E")"7:5; and Arsenio>s$ P/$E/$EEE minus the P7E$EEE which was alread advanced to him 4Pett Cash

+ouchers$ #hs. :$ "A to ":5.

'he CA originall held that respondents> counterclaim was premature$ pending an accounting of the

partnership. (owever$ in its assailed Resolution of August 13$ 1220$ it turned "olte face. Affirming thetrial court>s ruling on the counterclaim$ it held as follows9

:!e earlier ruled that there is still need for an accounting of the profits and losses of thepartnership before we can rule with certaint as to the respective shares of the partners. Gpon afurther review of the records of this case$ however$ there appears to be sufficient basis todetermine the amount of shares of the parties and damages incurred b s ruling alluded to above is Huoted below9

:/3. 'he defendants> counterclaim for the pament of their share in the profits of their %oint venture with

SA-',S is supported b the evidence.

:/3.1. -)+S testified that9 (er claim to a share in the profits is based on the agreement 4#hs. @$ @"A and@"5. 'he profits are shown in the wor?ing papers 4#hs. 1E to 1E")$ inclusive5 which she prepared. #hs. 1Eto 1E") 4inclusive5 were based on the dail cash flow reports of which #h. 7 is a sample. 'he originals of thedail cash flow reports 4#hs. 7 and 1@ to 1@"*41E5 were given to SA-',S. 'he %oint venture had a net profitof P/E$8/2$@/E.EE 4#h. 1E")"15$ from its operations from Bune 17$ 120 to April 12$ 1203 4#h. 1")"85. Shehad a share of P7$E8$8/0.EE 4#h. 1E")"75 and ARS-),$ about P/$2/$EEE.EE$ in the profits.

:/3.1.1 SA-',S never denied -)+S> testimon that the mone"lending business he was engaged in netteda profit and that the originals of the dail case flow reports were furnished to him. SA-',S however allegedthat the mone"lending operation of his %oint venture with -)+S and DAA' resulted in a loss of abouthalf a million pesos to him. ut such loss$ even if true$ does not negate -)+S> claim that overall$ the %ointventure among them SA-',S$ -)+S and ARS-), netted a profit. 'here is no reason for the Court

to doubt the veracit of


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:)nterest )ncome on )nvestment.: Such entries represent the collections of the mone"lending business orits gross income.

'he :total income: shown on #hibit :1E"): did not consider the e#penses sustained b the partnership.For instance$ it did not factor in the :gross loan releases: representing the mone loaned to clients. Sincethe business is mone"lending$ such releases are comparable with the inventor or supplies in other

business enterprises.

-oticeabl missing from the computation of the :total income: is the deduction of the wee?l allowancedisbursed to respondents. #hibits :): et seH. and :B: et seH./7show that Arsenio received allowances fromBul 12$ 120 to &arch /3$ 1203 in the aggregate amount of P/@$@EE; and -ieves$ from Bul 1/$ 120 to&arch /3$ 1203$ in the total amount of P/@$EE. 'hese allowances are different from the profit alreadreceived b Arsenio. 'he represent e#penses that should have been deducted from the business profits.'he point is that all e#penses incurred b the mone"lending enterprise of the parties must first bededucted from the :total income: in order to arrive at the :net profit: of the partnership. 'he share of eachone of them should be based on this :net profit: and not from the :gross income: or :total income:reflected in #hibit :1E")$: which the two courts invariabl referred to as :cash flow: sheets.

Similarl$ #hibits :1@: et seH.$/8which are the :*ail Cashflow Reports$: do not reflect the business

e#penses incurred b the parties$ because the show onl the dail cash collections. Contrar to therulings of both the trial and the appellate courts$ respondents> e#hibits do not reflectthe co!pletefinancial condition of the mone"lending business. 'he lower courts obviousl labored over amista?en notion that #hibit : 1E")"1: represented the :net profits: earned b the partnership.

For the purpose of determining the profit that should go to an industrial partner 4who shares in the profitsbut is not liable for the losses5$ the gross income from all the transactions carried on b the firm must beadded together$ and from this sum must be subtracted the e#penses or the losses sustained in the

business. ,nl in the difference representing the net profits does the industrial partner share. ut if$ onthe contrar$ the losses e#ceed the income$ the industrial partner does not share in the losses./@

!hen the %udgment of the CA is premised on a misapprehension of facts or a failure to notice certainrelevant facts that would otherwise %ustif a different conclusion$ as in this particular issue$ a review of its

factual findings ma be conducted$ as an e#ception to the general rule applied to the first two issues./

'he trial court has the advantage of observing the witnesses while the are testifing$ an opportunit notavailable to appellate courts. 'hus$ its assessment of the credibilit of witnesses and their testimonies areaccorded great weight$ even finalit$ when supported b substantial evidence; more so when suchassessment is affirmed b the CA. ut when the issue involves the evaluation of e#hibits or documentsthat are attached to the case records$ as in the third issue$ the rule ma be rela#ed. Gnder that situation$this Court has a similar opportunit to inspect$ e#amine and evaluate those records$ independentl of thelower courts. (ence$ we deem the award of the partnership share$ as computed b the trial court andadopted b the CA$ to be incomplete and not binding on this Court.

!(RF,R$ the Petition is partl 6RA-'*. 'he assailed -ovember /0$ 1223 *ecision is AFF)R&*$but the challenged Resolutions dated August 13$ 1220 and ,ctober 2$ 1220 are R+RS* and S'

AS)*. -o costs.

Santos vs. Reyes, 368 SCRA 261(2001)

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