Land Bank of the Philippines vs. Ramos

An appeal raises a question of fact when the resolution of the issue requires an examination of the probative value of the evidence presented; it raises a question of law only when the issue can be resolved solely on what the law provides on the given set of circumstances. 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 it, but whether the appellate court can determine the issue without reviewing or evaluating the evidence.

The case arose from a contract of sale between the Department of Public Works and Highways (DPWH) and respondent Crispin D. Ramos over a portion of co-owned land affected by a bridge construction project. The property was covered by Tax Declaration No. 573, and the parties to the sale were co-owners of the property through inheritance from the late Mariano Diaz. The DPWH paid the agreed consideration of P570,000.00 by debiting the amount from Ramos' account with petitioner Land Bank of the Philippines (LBP), which credited the funds to Ramos' deposit account.

In January 2000, the Department of Public Works and Highways (DPWH) and respondent Crispin D. Ramos entered into a contract of sale over a portion of land affected by the construction of the New Gayaman Bridge in Binmaley, Pangasinan. The property sold was co-owned, with Ramos as the sole vendee. The Deed of Absolute Sale recited that the property was under Tax Declaration No. 573, still in the name of the late Maximo Diaz, and that Ramos, together with Flora D. Ramos-Reyes, Gomercindo D. Ramos, and Jose Advito D. Ramos, were the compulsory heirs of the late Matea D. Ramos. The heirs of the late Matea Diaz-Ramos and the heirs of the late Maximo Diaz were co-owners of the parcel of land, with the latter's share having been alienated to Eduardo Concepcion. The deed stated that only Ramos voluntarily agreed to alienate a portion from his share of inheritance, containing an area of 1,140 square meters, for the agreed consideration of P570,000.00.

The DPWH paid the consideration by debiting the amount from Ramos' account with petitioner Land Bank of the Philippines (LBP), which credited the funds to Ramos' deposit account. Ramos was able to withdraw P100,000.00 from the account on March 26, 2001. In a letter dated April 10, 2001, DPWH requested LBP to hold in abeyance the release of payment to Ramos while it sought a legal opinion from the DPWH Central Office. Earlier, Jose Advito D. Ramos, a brother of respondent, had written to the DPWH claiming that as co-owner of the property, he was also entitled to his share in the proceeds of the sale.

Under a 1st Indorsement dated June 22, 2001, DPWH Legal Services Director Oscar D. Abundo opined that since the property was still owned in common by the heirs, all should participate or share in the proceeds of the payment, and that a Deed of Partition should be submitted to determine the degree of participation for every heir. The opinion concluded that no release or payment should be made until the issue was settled. On March 4, 2002, Ramos filed a Complaint for "Recovery of Bank Deposit With Damages" in the RTC of Lingayen, Pangasinan against LBP, its Branch Manager Ms. Kathleen Fernandez, and Field Attorney Atty. Jose L. Lopez, Jr.

LBP filed its Answer asserting that it was forced to litigate in a baseless suit which did not implead DPWH as the real party defendant, and filed a Third-Party Complaint against DPWH. In its Answer, DPWH contended that it was well within its right to request that payment be held in abeyance, and that absent any actual partition, Ramos could not appropriate as his own that portion of Lot 7382 sought to be acquired, which was owned pro-indiviso by all the co-owners. The parties agreed to submit the case for a judgment on the pleadings. The trial court rendered its decision on November 27, 2003, ordering LBP to allow Ramos to withdraw his deposit with interest, to pay litigation expenses of P10,000.00 and attorney's fees of P30,000.00, and dismissing the third-party complaint against DPWH.

• Jurisdiction of the CA: Petitioner LBP argued that the CA erred in dismissing its appeal for lack of jurisdiction, maintaining that its appeal raised not only questions of law but also questions of fact, particularly regarding the factual basis for the grant of damages in favor of respondent.
• Factual Basis for Damages: Petitioner assailed the trial court's award of litigation expenses and attorney's fees, arguing that the discretion 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.
• Nature of the Relation: Petitioner challenged the trial court's application of the law on the nature of the relation of the parties, particularly on the rights of DPWH to request withholding of release of payment and of petitioner as depositary bank to comply with such request.

• Right to Withhold Payment: DPWH contended that it was well within its right to request that payment to Ramos be held in abeyance, and that absent any actual partition, Ramos could not appropriate as his own that portion of the property sought to be acquired by DPWH, which was owned pro-indiviso by all the co-owners who were also entitled to receive their equal share of the payment.
• No Liability: DPWH asserted that it did not incur any liability for its action, the same being legal and justifiable under the circumstances.

• Jurisdiction of the Court of Appeals: Whether the Court of Appeals erred in dismissing petitioner's appeal for lack of jurisdiction on the ground that the appeal raised only pure questions of law.
• Question of Law vs. Question of Fact: Whether petitioner's appeal raised questions of fact, questions of law, or mixed questions of fact and law, thereby determining the proper mode of appeal.

• Jurisdiction of the Court of Appeals: Yes. The CA erred in dismissing the appeal for lack of jurisdiction. Since the appeal raised mixed questions of fact and law, the CA had jurisdiction to hear the appeal under Rule 41 of the Rules of Court.
• Question of Law vs. Question of Fact: The appeal raised mixed questions of fact and law. Petitioner assailed not just the trial court's alleged error in applying the law on the nature of the relation of the parties, but also the factual basis for the grant of damages in favor of respondent.

• Jurisdiction of the Court of Appeals: The Supreme Court applied the rule on appeals as summarized in Macawiwili Gold Mining and Development Co., Inc. vs. Court of Appeals: (1) appeals from the RTC in the exercise of its original jurisdiction raising questions of fact or mixed questions of fact and law may be made to the CA by mere notice of appeal; (2) appeals raising only questions of law must be taken to the Supreme Court on a petition for review on certiorari under Rule 45; and (3) all appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction shall be brought to the CA by filing a petition for review under Rule 42. Since the RTC decided the case in the exercise of its original jurisdiction, and the appeal raised mixed questions of fact and law, the appeal was properly brought to the CA by notice of appeal.

• Question of Law vs. Question of Fact: The Court defined a question of law as arising when there is doubt as to what the law is on a certain state of facts, while a question of fact arises when the doubt is as to the truth or falsity of the alleged facts. For a question to be one of law, it must not involve an examination of the probative value of the evidence presented. The test is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence. In this case, petitioner's appeal did not raise only questions of law but also questions of fact, because petitioner assailed the factual basis for the grant of damages. 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. Since the appeal raised mixed questions of law and fact, the CA clearly erred in dismissing the case on the ground of lack of jurisdiction.

• Question of Law vs. Question of Fact — A question of law arises when there is doubt as to what the law is on a certain state of facts, while a question of fact arises when the doubt is 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. 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.

• Modes of Appeal from the RTC — In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law. In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45. All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, regardless of whether the appellant raises questions of fact, questions of law, or mixed questions of fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule 42.

• Award of Attorney's Fees — 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.

• "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." — This passage defines the controlling distinction between questions of law and questions of fact, which is the central doctrinal issue in the case.

• "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." — This passage establishes the test for determining whether a question is one of law or of fact, which the Court applied to find that the CA erred in dismissing the appeal.

• "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." — This passage explains why the appeal raised questions of fact, as the award of damages required factual justification that the appellate court would need to review.

• Macawiwili Gold Mining and Development Co., Inc. vs. Court of Appeals, G.R. No. 115104, October 12, 1998, 297 SCRA 602 — Controlling precedent summarizing the rule on appeals from the RTC, which the Court applied to determine the proper mode of appeal in this case.
• Sevilleno vs. Carilo, G.R. No. 146454, September 14, 2007, 533 SCRA 385 — Cited as authority for the summary of the rule on appeals.
• Republic vs. Malabanan, G.R. No. 169067, October 6, 2010, 632 SCRA 338 — Cited for the definition and test of questions of law versus questions of fact.
• Leoncio vs. De Vera, G.R. No. 176842, February 18, 2008, 546 SCRA 180 — Cited in Republic vs. Malabanan for the definition of questions of law and fact.
• Delos Santos vs. Papa, G.R. No. 154427, May 8, 2009, 587 SCRA 385 — Cited for the proposition that the award of attorney's fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification.

• Rule 45, 1997 Rules of Civil Procedure — Provides for appeal to the Supreme Court by petition for review on certiorari in cases where only questions of law are raised. The Court held that this rule was inapplicable because the appeal raised mixed questions of fact and law.
• Rule 41, 1997 Rules of Civil Procedure — Provides for ordinary appeal by notice of appeal to the Court of Appeals in cases decided by the RTC in the exercise of its original jurisdiction where questions of fact or mixed questions of fact and law are raised. The Court held that this was the proper mode of appeal in this case.
• Rule 42, 1997 Rules of Civil Procedure — Provides for appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, which shall be brought to the CA by filing a petition for review.
• Article 2208, Civil Code — Governs the award of attorney's fees, which the Court noted demands factual, legal, and equitable justification.

Chief Justice Maria Lourdes P. A. Sereno, Associate Justice Teresita J. Leonardo-de Castro, Associate Justice Lucas P. Bersamin, and Associate Justice Bienvenido L. Reyes concurred with the decision of Justice Martin S. Villarama, Jr.