G.R. No. 146504. April 9, 2002.
HONORIO L. CARLOS, petitioner, vs. MANUEL T. ABELARDO, respondent.

FACTS

Petitioner Honorio L. Carlos filed a complaint for a sum of money and damages against his son-in-law, respondent Manuel T. Abelardo, and his daughter, Maria Theresa Carlos-Abelardo. Petitioner averred that in October 1989, the spouses requested him to advance US$25,000.00 for the purchase of a house and lot in Parañaque. On October 31, 1989, petitioner issued a check for that amount payable to the seller, Pura Vallejo, in full payment of the property. In July 1991, the spouses acknowledged the obligation but pleaded inability to settle. Respondent allegedly made death threats against petitioner. After a formal demand in August 1994 went unheeded, petitioner filed the complaint.
In his Answer, respondent admitted receiving the US$25,000.00 but claimed it was his share in the profits of H.L. Carlos Construction, which he had revived and managed, and not a loan. He denied making threats.
The Regional Trial Court ruled in favor of petitioner, ordering the spouses to pay the loan with interest and awarding moral and exemplary damages and attorney’s fees against respondent. The Court of Appeals reversed, dismissing the complaint for insufficiency of evidence and finding the amount to be respondent’s profit share.

ISSUE

Whether the Court of Appeals erred in finding insufficient evidence to prove that the US$25,000.00 was a loan and in dismissing the complaint.

RULING

Yes, the Court of Appeals erred. The Supreme Court granted the petition and modified the appellate court’s decision.
The Supreme Court found that the evidence sufficiently established by a preponderance of evidence that the amount was a loan. The undisputed facts were: (1) petitioner issued a US$25,000.00 check; (2) respondent and his wife received and used it to fully pay for their conjugal home; (3) respondent’s wife executed an instrument acknowledging the loan. Petitioner presented the check, the acknowledgment instrument, and a demand letter. Respondent’s claim that it was his profit share from H.L. Carlos Construction failed. The check was drawn from petitioner’s personal account, not the corporation’s. Respondent was not a stockholder, officer, employee, or agent of the corporation, and his name did not appear in its incorporation papers, thus he had no right to its profits. His presentation of checks from the corporation’s account did not prove the US$25,000.00 was profit-related.
The Court reinstated the trial court’s finding of a loan obligation, solidarily liable upon the spouses as it redounded to the benefit of the family. The award of damages was justified based on respondent’s death threats, corroborated by witness testimony, a police blotter entry, and a letter from respondent’s wife. However, the Supreme Court reduced the amounts: moral damages from P500,000.00 to P50,000.00; exemplary damages from P50,000.00 to P20,000.00; and attorney’s fees from P100,000.00 to P50,000.00.
Respondent was ordered to pay petitioner: (1) US$25,000.00 or its Philippine Peso equivalent at payment, plus legal interest from August 24, 1994; (2) P50,000.00 as moral damages; (3) P20,000.00 as exemplary damages; and (4) P50,000.00 as attorney’s fees.