GR 215072; (September, 2016) (Digest)
G.R. No. 215072, September 07, 2016
PHILIPPINE NATIONAL BANK, PETITIONER, VS. HEIRS OF THE LATE IRENEO AND CARIDAD ENTAPA, RESPONDENTS.
FACTS
The respondents, heirs of Caridad Entapa, sought to repurchase a family property, Lot No. 2665, which had been mortgaged by their attorney-in-fact, Joseph Gonzaga, to the Philippine National Bank (PNB) and subsequently foreclosed. In 1995, respondent Rosario Entapa Orpeza requested PNB to restructure the loan under Republic Act No. 7202. PNB approved a Thirteen-Year Plan of Payment in 1996, requiring a 20% down payment and payment of realty tax arrears. Orpeza complied, depositing P178,336.19 and paying the taxes.
Thereafter, Orpeza discovered that the lot was already occupied by agrarian reform beneficiaries holding Certificates of Land Ownership Award (CLOAs). Investigation revealed that PNB had voluntarily offered the lot for sale to the Department of Agrarian Reform (DAR) under the Comprehensive Agrarian Reform Program in 1989. Despite demands, PNB refused to refund Orpeza’s payments. The heirs thus filed a complaint for collection of sum of money.
ISSUE
Whether the Court of Appeals correctly nullified the Regional Trial Court’s decision for failing to state the factual and legal bases for its judgment.
RULING
Yes, the Court of Appeals’ nullification was proper. The Supreme Court affirmed that the Regional Trial Court’s decision was void for violating the constitutional mandate under Article VIII, Section 14 of the Constitution and Section 1, Rule 36 of the Rules of Court, which require a court to state clearly and distinctly the facts and the law upon which its decision is based.
The RTC decision merely recited the procedural history and allegations of the parties. It concluded by ordering PNB to refund the down payment and realty taxes, and to pay damages, without any analysis. The decision did not explain why PNB was liable, how the elements of the cause of action were satisfied, or the legal justification for the awarded damages. It contained no findings of fact derived from the evidence nor application of law to those facts. A judgment that does not comply with this requirement is a nullity, as it fails to inform the parties of the reasons for the decision and hinders intelligent appellate review. The Court of Appeals, therefore, correctly remanded the case to the RTC for the rendition of a new decision that complies with the constitutional and procedural mandate. The Supreme Court emphasized that this requirement is fundamental to due process and the orderly administration of justice.