Traders Royal Bank vs. Court of Appeals

When a party is obliged to return property that has been lost through his fault, he must return the value of the property at the time of loss with interest from that date; where the parties effectively stipulate to the value of the property by citing the specific purchase price in their pleadings, the court may award said amount with legal interest at 12% per annum as forbearance of credit, and an omission in the dispositive portion of a decision does not constitute deletion of an award if the underlying decision of the lower court sustaining such award was affirmed.

The case involves a dispute over real property where the Register of Deeds failed to carry over a notice of lis pendens to the certificate of title registered in the name of Traders Royal Bank (TRB). TRB subsequently sold the property to Emelita Santiago. The Capays and Ramon Gonzales, claiming to be the rightful owners, secured a favorable judgment from the trial court which ordered the cancellation of the certificates of titles issued to subsequent transferees and the issuance of new ones in their favor, as well as damages against TRB.

• The case originated from a dispute involving real property where the Register of Deeds failed to carry over a notice of lis pendens to the certificate of title registered in the name of Traders Royal Bank (TRB).
• TRB subsequently sold the disputed property to Emelita Santiago for P47,730.00 as evidenced by a Deed of Absolute Sale.
• The Capays and Ramon Gonzales filed a complaint seeking the cancellation of certificates of titles issued to subsequent transferees and the issuance of new ones in their favor, as well as damages against TRB.
• The Regional Trial Court ruled in favor of the Capays and Gonzales, ordering the cancellation of titles in the names of the transferees, the issuance of new certificates of title to the Capays, and awarding moral damages of P100,000.00, exemplary damages of P40,000.00, and attorney's fees of P40,000.00 against TRB, with legal interest from the filing of the complaint.
• The Court of Appeals initially affirmed the decision in toto, but subsequently granted the motion for reconsideration filed by the subsequent transferees, dismissing the complaint as against them and restoring their certificates of titles, while sustaining the award of damages against TRB.
• TRB appealed to the Supreme Court, which affirmed the Court of Appeals' decision as modified by its resolution; however, the dispositive portion of the Supreme Court's decision ordered TRB to pay the "fair market value" of the property at the time it was sold to Emelita Santiago.
• The Capays and Gonzales filed a Motion for Partial Reconsideration praying that the award of damages be expressly included in the dispositive portion and that TRB be ordered to pay the specific amount of P47,730.00 (the price in the Deed of Absolute Sale) with 12% interest instead of the fair market value.

• The Capays and Ramon Gonzales argued that the Supreme Court's omission of the damages award in the dispositive portion of its September 29, 1999 Decision should be rectified by expressly including the award of P100,000.00 as moral damages, P40,000.00 as exemplary damages, and P40,000.00 as attorney's fees, all with legal interest from the time of filing the complaint.
• They contended that TRB should be ordered to pay the specific amount of P47,730.00, representing the price stipulated in the Deed of Absolute Sale between TRB and Emelita Santiago, plus interest at 12% per annum from the date of said contract, rather than the fair market value of the property at the time of sale.

• Traders Royal Bank (TRB) posed no objection to the prayer that the value of the property be fixed at P47,730.00 as stated in the Deed of Absolute Sale, effectively stipulating to this valuation.
• TRB had previously appealed the decision to the Supreme Court but did not specifically question the award of damages, rendering such issue beyond the Court's review.

• Procedural Issues:
  • Whether the Supreme Court's omission of the damages award in the dispositive portion of its decision constitutes a deletion of such award.
  • Whether the award of damages should be expressly included in the dispositive portion of the decision.
• Substantive Issues:
  • Whether the Capays are entitled to the specific amount of P47,730.00 (the contract price between TRB and Santiago) rather than the fair market value of the property.
  • Whether the Capays are entitled to interest at 12% per annum on the value of the property from the date of sale.

• Procedural:
  • The Court held that the omission of the damages award in the dispositive portion does not constitute a deletion thereof. The Court clarified that it merely affirmed the Decision of the Court of Appeals dated February 24, 1994, as modified by its Resolution dated August 10, 1994, which had sustained the award of damages against TRB.
  • Since TRB did not specifically question the award of damages when it appealed to the Supreme Court, the issue was beyond the Court's review.
  • The Court denied the prayer for the inclusion of the damages award in the dispositive portion, explaining that the omission should not be read as a deletion and that the award remained valid under the affirmed CA decision.
• Substantive:
  • The Court granted the prayer to fix the liability at P47,730.00, taking the price stated in the Deed of Absolute Sale as a stipulation between the parties on the value of the property.
  • Applying Article 1400 of the Civil Code, the Court held that the Capays are entitled to the value of the property at the time of loss (the sale to Emelita Santiago) with interest from said date.
  • The Court ordered TRB to pay the amount of P47,730.00 with 12% interest per annum from the date of sale until fully paid, treating the value of the property as equivalent to a forbearance of credit pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals.

• Article 1400 of the Civil Code (Obligation to Return Value of Lost Thing) — Provides that when a person obliged by decree of annulment to return the thing cannot do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the said date. Applied in this case to justify the award of the value of the property plus interest from the date of sale.
• Effect of Failure to Assign Error on Appeal — Issues not specifically raised or questioned in the appeal are deemed waived and beyond the appellate court's review. Applied to hold that the award of damages was not subject to review since TRB did not specifically question it.
• Interpretation of Dispositive Portion — An omission in the dispositive portion of a decision should not be read as a deletion of the award if the underlying decision of the lower court sustaining such award was affirmed.

• "Whenever the person obliged by the decree of annulment to return the thing can not do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the said date." (Article 1400, Civil Code)
• "The omission should not be read as a deletion of the award for damages."

• Eastern Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994) — Cited as authority for imposing 12% interest per annum on the value of the property, treating it as equivalent to a forbearance of credit.

• Article 1400 of the Civil Code — Governs the obligation to return the value of a thing that has been lost through the obligor's fault, including the payment of interest from the date of loss.

• Davide, Jr., C.J. — Concur.
• Puno, J. — Concur.
• Ynares-Santiago, J. — Concur.