GR 124271; (August, 1996) (Digest)
G.R. No. 124271 August 22, 1996
SPS. RAMON AND SYLVIA CARRION, petitioners, vs. COURT OF APPEALS, ELSA RAMIREZ and BELEN GREGORIO, respondents.
FACTS
Petitioners obtained loans of P60,000 each from private respondents, secured by postdated checks. Upon maturity, petitioners persuaded respondents not to encash the checks and instead executed promissory notes for P85,517 each, representing the principal plus 12% annual interest for two years. After petitioners failed to pay for over seven years, respondents filed a complaint for sum of money. The Regional Trial Court ruled that the transaction was not a simple loan but an investment in a movie production business, akin to a partnership. Consequently, it ordered petitioners to return only the principal amount of P60,000 to each respondent, without interest, based on the principle of unjust enrichment, plus attorney’s fees.
Petitioners appealed this decision to the Court of Appeals. Private respondents did not file their own appeal or a cross-appeal challenging the trial court’s legal characterization of the contract or the disallowance of interest. The Court of Appeals, however, modified the trial court’s judgment. It ruled that the transaction was a contract of simple loan, not a partnership, and held petitioners solidarily liable to pay each respondent P85,519.18 with stipulated interest, attorney’s fees, and moral damages.
ISSUE
Whether the Court of Appeals erred in granting affirmative relief to private respondents who did not appeal from the trial court’s decision.
RULING
Yes. The Supreme Court set aside the decision of the Court of Appeals and reinstated the trial court’s judgment. The Court applied the well-entrenched doctrine that an appellee who does not appeal cannot obtain from the appellate court any affirmative relief other than what was granted in the decision of the court below. The purpose of an appellee’s assignment of error is merely to defend the judgment in his favor, not to seek its modification or reversal. Since private respondents did not appeal, they were deemed to have accepted the trial court’s findings of fact and conclusions of law, including its ruling that the contract created a partnership, not a loan. Consequently, the judgment of the trial court had attained finality as to them. The Court of Appeals committed a reversible error by modifying the decision to grant respondents affirmative relief—specifically, payment of the amount in the promissory notes with interest and damages—which they did not seek through a proper appeal. The modification exceeded the scope of a defensive appeal and improperly altered rights that had been settled by the unappealed portions of the trial court’s decision.