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Cabrera Case
Cabrera Case
SYNOPSIS
Respondent led a claim for damages against the petitioners, based on the latter's
alleged failure to return to him construction materials and equipment deposited by him to
their warehouse. Petitioners were declared in default. Respondent was allowed to present
evidence ex parte. The trial court and the CA subsequently decided the case in favor of the
respondent.
On appeal, the Supreme Court held: that while the Court is not a trier of facts, and
does not normally undertake the re-examination of the evidence submitted by the parties,
this case is an exception to the general rule since both the trial court and the CA based
their judgments on misapprehension of facts. The Court held that respondent had no right
whatsoever to claim for damages, considering that there was no contract of deposit
between the parties and there were no more construction materials or equipment in
petitioners' warehouse when respondent made a demand for their return. The Court also
stressed that a judgment of default does not automatically imply admission by the
defendant of plaintiff's causes of action.
SYLLABUS
DECISION
SANDOVAL-GUTIERREZ , J : p
Deponent Damiano Nadera testi ed on the current cost of the architectural and
structural requirements needed to complete the construction of the New Gran Hotel. 2 3
On December 26, 1996, the trial court rendered a decision in favor of respondent,
thus:
"WHEREFORE, foregoing considered, judgment is hereby rendered ordering
defendants to jointly and severally pay plaintiff:
Petitioners then elevated the case to the Court of Appeals, docketed as CA-G.R. CV
No. 57323. On June 17, 1999, the Appellate Court rendered the assailed Decision 2 5
affirming in toto the trial court's judgment, ratiocinating as follows:
"Moreover, although the prayer in the complaint did not specify the amount
of damages sought, the same was satisfactorily proved during the trial. For
damages to be awarded, it is essential that the claimant satisfactorily prove
during the trial the existence of the factual basis thereof and its causal
connection with the adverse party's act ( PAL, Inc. vs. NLRC , 259 SCRA 459). In
sustaining appellee's claim for damages, the court a quo held as follows:
'The Court nds the contention of plaintiff that materials and
equipment of plaintiff were stored in the warehouse of defendants and
admitted by defendants in the certification issued to Sheriff Borja. . . .
'Evidence further revealed that assorted materials owned by the New
Gran Hotel (Exh. "C") were deposited in the bodega of defendant Wilson
Chan with a total market value of P1,930,000.00, current price.
'The inventory of other materials, aside from the steel bars and
cement, is highly reliable based on rst, the a davit of Arthur Edralin
dated September 15, 1979, personnel o cer of Moreman Builders; that he
was assigned, with others to guard the warehouse (Exhs. M & O); secondly,
the inventory (Exh. C) November 23, 1977 shows deposit of assorted
materials; thirdly, that there were items in the warehouse as of February 3,
1978, as shown in the balance sheet of Moreman's stock clerk, Jose
Cedilla (pp. 60–61, Rollo).'
"The Court affirms the above findings.
Hence, this petition for review on certiorari anchored on the following grounds:
"I
The Court of Appeals acted with grave abuse of discretion and under a
misapprehension of the law and the facts when it a rmed in toto the award of
actual damages made by the trial court in favor of respondent in this case. CTSDAI
II
Petitioners contend inter alia that the actual damages claimed by respondent in the
present case were already awarded to him in Civil Case No. 113498 2 6 and hence, cannot
be recovered by him again. Even assuming that respondent is entitled to damages, he can
not recover P4,479,000.00 which is eleven (11) times more than the total actual damages
of P365,000.00 awarded to him in Civil Case No. 113498. 2 7
In his comment on the petition, respondent maintains that petitioners, as
depositaries under the law, have both the duciary and extraordinary obligations not only
to safely keep the construction material deposited, but also to return them with all their
products, accessories and accessions, pursuant to Articles 1972, 2 8 1979, 2 9 1983, 30 and
1988 3 1 of the Civil Code. Considering that petitioners' duty to return the construction
materials in question has already become impossible, it is only proper that the prices of
those construction materials in 1996 should be the basis of the award of actual damages.
This is the only way to ful ll the " duty to return" contemplated in the applicable laws. 3 2
Respondent further claims that petitioners must bear the increase in market prices from
1977 to 1996 because liability for fraud includes "all damages which may be reasonably
attributed to the non-performance of the obligation." Lastly, respondent insists that there
can be no double recovery because in Civil Case No. 113498, 3 3 the parties were
respondent himself and Moreman and the cause of action was the rescission of their
building contract. In the present case, however, the parties are respondent and petitioners
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and the cause of action between them is for recovery of damages arising from petitioners'
failure to return the construction materials and equipment.
Obviously, petitioners' assigned errors call for a review of the lower court's ndings
of fact.
Succinct is the rule that this Court is not a trier of facts and does not normally
undertake the re-examination of the evidence submitted by the contending parties during
the trial of the case considering that ndings of fact of the Court of Appeals are generally
binding and conclusive on this Court. 3 4 The jurisdiction of this Court in a petition for
review on certiorari is limited to reviewing only errors of law, 3 5 not of fact, unless it is
shown, inter alia, that: (1) the conclusion is a nding grounded on speculations, surmises
or conjectures; (2) the inference is manifestly mistaken, absurd and impossible; (3) there
is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; (5)
the ndings of fact are con icting; and (6) the Court of Appeals, in making its ndings
went beyond the issues of the case and the same is contrary to the admission of both
parties. 3 6
Petitioners submit that this case is an exception to the general rule since both the
trial court and the Court of Appeals based their judgments on misapprehension of facts.
We agree.
At the outset, the case should have been dismissed outright by the trial court
because of patent procedural in rmities. It bears stressing that the case was originally
led on December 11, 1985. Four (4) years thereafter, or on August 25, 1989, the case was
dismissed for respondent's failure to prosecute. Five (5) years after, or on September 6,
1994, respondent led his motion for reconsideration. From here, the trial court already
erred in its ruling because it should have dismissed the motion for reconsideration outright
as it was led far beyond the fteen-day reglementary period. 3 7 Worse, when respondent
led his second motion for reconsideration on October 14, 1994, a prohibited pleading, 3 8
the trial court still granted the same and reinstated the case on January 10, 1995. This is a
glaring gross procedural error committed by both the trial court and the Court of Appeals.
Even without such serious procedural aw, the case should also be dismissed for
utter lack of merit.
It must be stressed that respondent's claim for damages is based on petitioners'
failure to return or to release to him the construction materials and equipment deposited
by Moreman to their warehouse. Hence, the essential issues to be resolved are: (1) Has
respondent presented proof that the construction materials and equipment were actually
in petitioners' warehouse when he asked that the same be turned over to him? (2) If so,
does respondent have the right to demand the release of the said materials and equipment
or claim for damages?
Under Article 1311 of the Civil Code, contracts are binding upon the parties (and
their assigns and heirs) who execute them. When there is no privity of contract, there is
likewise no obligation or liability to speak about and thus no cause of action arises.
Speci cally, in an action against the depositary, the burden is on the plaintiff to prove the
bailment or deposit and the performance of conditions precedent to the right of action. 3 9
A depositary is obliged to return the thing to the depositor, or to his heirs or successors, or
to the person who may have been designated in the contract. 4 0
In the present case, the record is bereft of any contract of deposit, oral or written,
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between petitioners and respondent. If at all, it was only between petitioners and
Moreman. And granting arguendo that there was indeed a contract of deposit between
petitioners and Moreman, it is still incumbent upon respondent to prove its existence and
that it was executed in his favor. However, respondent miserably failed to do so. The only
pieces of evidence respondent presented to prove the contract of deposit were the
delivery receipts. 4 1 Signi cantly, they are unsigned and not duly received or authenticated
by either Moreman, petitioners or respondent or any of their authorized representatives.
Hence, those delivery receipts have no probative value at all. While our laws grant a person
the remedial right to prosecute or institute a civil action against another for the
enforcement or protection of a right, or the prevention or redress of a wrong, 4 2 every
cause of action ex-contractu must be founded upon a contract, oral or written, express or
implied.
Moreover, respondent also failed to prove that there were construction materials
and equipment in petitioners' warehouse at the time he made a demand for their return.
Considering that respondent failed to prove (1) the existence of any contract of
deposit between him and petitioners, nor between the latter and Moreman in his favor, and
(2) that there were construction materials in petitioners' warehouse at the time of
respondent's demand to return the same, we hold that petitioners have no corresponding
obligation or liability to respondent with respect to those construction materials. CTSDAI
Anent the issue of damages, petitioners are still not liable because, as expressly
provided for in Article 2199 of the Civil Code, 4 3 actual or compensatory damages cannot
be presumed, but must be proved with reasonable degree of certainty. A court cannot rely
on speculations, conjectures, or guesswork as to the fact and amount of damages, but
must depend upon competent proof that they have been suffered by the injured party and
on the best obtainable evidence of the actual amount thereof. It must point out speci c
facts which could afford a basis for measuring whatever compensatory or actual damages
are borne. 4 4
Considering our ndings that there was no contract of deposit between petitioners
and respondent or Moreman and that actually there were no more construction materials
or equipment in petitioners' warehouse when respondent made a demand for their return,
we hold that he has no right whatsoever to claim for damages.
As we stressed in the beginning, a judgment of default does not automatically imply
admission by the defendant of plaintiff's causes of action. Here, the trial court merely
adopted respondent's allegations in his complaint and evidence without evaluating them
with the highest degree of objectivity and certainty.
WHEREFORE, the petition is GRANTED. The challenged Decision of the Court of
Appeals dated June 17, 1999 is REVERSED and SET ASIDE. Costs against respondent. TDESCa
SO ORDERED.
Puno, Panganiban, Corona and Carpio Morales, JJ., concur.
Footnotes
* Presently Executive Judge, Regional Trial Court, Las Piñas City and Presiding Judge, RTC,
Branch 275, Las Piñas City.
29. Art. 1979. The depositary is liable for the loss of the thing through a fortuitous
event:
1. If it is so stipulated;
2. If he uses the thing without the depositor's permission;
3. If he delays its return;
4. If he allows others to use it, even though he himself may have been authorized
to use the same.
30. Art. 1983. The thing deposited shall be returned with all its products, accessories
and accessions.
Should the deposit consist of money, the provisions relative to agents in article 1896
shall be applied to the depositary.
31. Art. 1988. The thing deposited must be returned to the depositor upon demand,
even though a specified period or time for such return may have been fixed.
This provision shall not apply when the thing is judicially attached while in the
depositary's possession, or should he have been notified of the opposition of a third
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person to the return or removal of the thing deposited. In these cases, the depositary
must immediately inform the depositor of the attachment or opposition.
32. Rollo at 122.
33. Rollo at 40–76.
34. Congregation of the Religious of the Virgin Mary vs. Court of Appeals, G.R. No. 126363,
June 26, 1998, citing Dela Cerna vs. Court of Appeals, 233 SCRA 325.
35. Section 1, Rule 45, Revised Rules of Court.
36. Fule vs. Court of Appeals, G.R. No. 112212, March 2, 1998.
37. Section 3, Rule 41 in relation to Sec. 1, Rule 37 of the 1997 Rules of Civil Procedure, as
amended.
38. Section 5(2), Rule 37, id.
39. 26 C.J.S. § 6.
44. Development Bank of the Philippines vs. Court of Appeals, G.R. No. 118342, January 5,
1998.