GR 155223; (April, 2007) (Digest)
G.R. No. 155223. April 4, 2007.
BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F. FUJITA, Petitioner, vs. FLORA SAN DIEGO-SISON, Respondent.
FACTS
Petitioner Bobie Rose Frias and respondent Flora San Diego-Sison entered into a Memorandum of Agreement (MOA) dated December 7, 1990, concerning a house and lot owned by Frias. Under the MOA, Sison paid Frias ₱3,000,000.00. Sison was given six months to decide whether to purchase the property for ₱6,400,000.00. If she decided not to buy, the ₱3,000,000.00 would be treated as a loan payable by Frias within another six months, with the property as security. Sison notified Frias of her decision not to purchase. Frias failed to repay the amount. Sison filed a complaint for sum of money. Frias defended by claiming the MOA was signed without reading it, that the title documents were lost, and that part of the money was taken by their shared lawyer.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s decision holding Frias liable to pay Sison the sum of ₱2,000,000.00 with interest and damages.
RULING
The Supreme Court denied the petition and affirmed the CA decision. The MOA’s terms are clear and govern the parties’ rights. The agreement explicitly stipulated that if Sison decided not to purchase the property, the amount she advanced would be considered a loan secured by the property. Sison validly exercised her option not to buy and demanded repayment. Frias’s defenses of vitiated consent and loss of the title documents were unsubstantiated. The factual findings of the lower courts, which found Frias’s version not credible, are binding. The conversion of the advance into a loan was a condition expressly agreed upon, not a unilateral imposition. Consequently, Frias’s obligation to repay the ₱2,000,000.00 (the valid portion of the ₱3,000,000.00, one million having been via a stale check) became demandable. The award of interest and nominal damages was proper due to Frias’s unjustified refusal to pay and her act of falsely reporting the title lost to defeat the security. However, the Court deleted the awards for moral and exemplary damages and reduced the attorney’s fees for lack of sufficient basis, upholding only the compensatory aspect of the judgment.