#5 G.R. No.

128609               January 29, 2004 PSBank sold the property to private respondent spouses Tomas Co and Saturnina
Baria, in whose favor Transfer Certificate of Title  No. 14239 was subsequently
DOUGLAS F. ANAMA issued.
vs.
COURT OF APPEALS, PHILIPPINE SAVINGS BANK, SPS. TOMAS CO & Despite the sale to respondent spouses, the Bank on February 15, 1980, even
SATURNINA BARIA and REGISTER OF DEEDS, METRO MANILA, DISTRICT II,  prevented petitioner from making withdrawals from his father’s account since the
deposits were purportedly treated as payments under the contract.
FACTS:
On March 1, 1982, petitioner filed a complaint before the RTC of Pasig against
On March 24, 1973, petitioner Douglas Anama and private respondent Philippine PSBank, spouses Baria and Co, and the Register of Deeds for Metro Manila, District
Savings Bank (PSBank) entered into an agreement denominated as a Contract to II (Pasig, Metro Manila) for "Declaration of Nullity of Deed of Sale, Cancellation of
Buy whereby the latter agreed to sell to the former a parcel of land, together with the Transfer Certificate of Title, and Specific Performance with Damages."
improvements thereon. The property was previously owned by petitioner’s parents,
who mortgaged it to respondent Bank. Upon their failure to pay the loan extended to After trial, the RTC issued an Order  dated March 31, 1989 requiring the parties to file
them by PSBank, the latter foreclosed on the property. their respective memoranda:

Petitioner was able to pay the first and second installments on March 24, 1973 and The parties are given a period of thirty (30) days FROM THE COMPLETION OF ALL
April 13, 1973, respectively. However, when the third installment in the amount of TRANSCRIPTS of stenographic notes taken in the proceedings to file their
P20,000.00 became due, petitioner failed to pay the same. simultaneous memoranda, furnishing each other copy of their respective
memorandum and all of them are given a period of fifteen (15) days from receipt of the
respective memorandum to file a reply-memorandum. THEREAFTER, the case shall
In a handwritten letter dated July 5, 1974, petitioner’s father, Felix Anama, asked be deemed submitted for decision.
respondent Bank for an extension of time to pay the balance and offered to make a
deposit of P3,000.00 on the same savings account as a sign of good faith. On August 27, 1990, the RTC directed the completion of the transcript of
stenographic notes (TSN):
On February 22, 1975, petitioner paid respondent Bank the amount of P17,500.00.
Considering that the above-entitled case is now considered submitted for decision
On May 31, 1976, petitioner sent a letter to the Bank through Mr. Juanito dela Cruz, BUT CANNOT be decided with the absence of some transcripts of stenographic
then the Vice-President of PSBank, promising to pay the balance in the sum of notes, stenographer Miss Celis P. Claravall of this branch is hereby ordered within
thirty (30) days from today within which to submit her transcripts of the hearings held
P20,000.00 on or before August 3, 1976.
on January 30, 1987, July 10, 1987 and September 27, 1988.

Subsequently, on November 25, 1976, petitioner again paid PSBank the sum of On June 19, 1991, the RTC noted a Motion for Early Resolution  filed by respondent
P15,208.34. This payment, as well as that of February 22, 1975, was taken from the Bank. It attributed the delay in the resolution of the case to the incomplete transcript:
account of petitioner’s father Felix, who allegedly assigned his savings account under
AC #11-200781-4 in favor of PSBank by means of withdrawal slips. Respondent Bank
issued official receipts (Nos. 130561 and 148693) indicating that these payments Submitted for Resolution is the "Motion for Early Resolution" filed by defendant
Philippine Savings Bank.
covered "penalty/interest charges" for the delay in the payment of the third
installment.
It appears on record that the Court issued an Order dated August 27, 1990 to submit
the lacking transcripts as the case COULD NOT BE decided without these transcripts.
On September 9, 1977, the Bank executed an Affidavit of Cancellation  rescinding the It is to be noted that this is an inherited case and before this Presiding Judge assumed
contract. Petitioner was then advised to vacate the premises. In addition, respondent office, the stenographic notes taken during the proceedings before his assumption
Bank forfeited the payments made by petitioner, which were applied as rentals for the have not been completed and submitted. It is only after his assumption that
use of the property. stenographers concerned were directed to complete and submit their transcripts and
at present, only one (1) stenographer have (sic) not yet completed and submitted her
transcripts. Although, the Court noted the herein motion, it is already in the process of
Petitioner opposed the rescission of the Contract to Buy in a letter addressed to Mr. resolving the merits of the case and a decision shall be rendered in due time.
Juanito dela Cruz, then General Manager of PSBank. Petitioner wrote that he was led
to believe that the Bank treated the deposits he made as payments on the Contract to
RTC: The incomplete TSN notwithstanding, the RTC rendered a Decision in favor of
Buy.
respondent Bank. It held that the Bank’s rescission of the contract was justified since
petitioner failed to meet the terms of the Contract to Buy.
On September 12, 1991, petitioner filed a Notice of Appeal to  which the RTC gave assignment of errors since the petition had substantially complied with the
due course on October 8, 1991. The records of the case, however, could not be requirement of the Rules of Court:
transmitted to the Court of Appeals because the transcript of January 30, 1987,
covering the cross-examination of Atty. Raul Totañes, witness for respondent Bank, Want of specific assignment of errors in appellant’s brief (LEA), is one of the grounds
could not be produced. The stenographer who took down the testimony had for the dismissal of an appeal under Section 1(f), Rule 52, of the Rules of Court. This
already resigned and migrated to Australia. ground proved fatal in several cases for where no assignment of errors is made, no
question may be considered by the appellate court (Section 5, Rule 53, now Section
7, Rule 51, Rules of Court). Substantial compliance with the requirements is however
Thus, on February 17, 1992 the RTC issued an Order inviting the parties to a sufficient. The underlying reason for the rule is to point out to the court the specific
conference to discuss the missing portion of the TSN. part of the appealed judgment which the appellant seeks to controvert.

On the day of the conference, the parties agreed to the retaking of the testimony of The assignment of errors embodied in LEA’s petition for certiorari, the statement of
Atty. Totañes on June 2, 1992. the issues in its amended petition and the clear discussion of the points in issue in its
brief have accomplished the task of informing this Court which part of the decision of
the Court of Industrial Relations is sought to be reviewed. LEA’s appeal in L-18681
On August 14, 1992, petitioner, after receiving a copy of the TSN of Atty. Totañes’ ought not therefore to be dismissed, as urged by LUZON, merely for the so-called lack
retaken testimony, submitted his Memorandum in compliance with the previous of an assignment of errors in LEA’s brief. Pleadings, as well as remedial laws, should
RTC Order  dated March 31, 1989. On the same date, he submitted a position paper be construed liberally, in order that the litigants may have ample opportunity to prove
claiming that the court’s decision was null and void. Petitioner argued that he was not their respective claims, and that a possible denial of substantial justice, due to legal
permitted to submit his memorandum and was, therefore, deprived of due process. technicalities, may be avoided.

In its Order dated September 30, 1992, the RTC declined to rule on the question of In the present case, the Appellant’s Brief contains an enumeration of "Appellant’s
due process. It held that the issue was beyond its "competence" in light of the Arguments," followed by an extensive discussion pointing to evidence to support
approval of petitioner’s notice of appeal: petitioner’s theory that he had paid respondent Bank the third installment and that the
Bank had waived its right to rescind the contract. Preceding that is a lengthy
exposition explaining why the Decision of the RTC was void for failure to observe due
CA: dismissed the appeal for the failure of petitioner to make an assignment of errors
process. These portions of the brief fulfill the purpose of an assignment of errors for it
in his Appellant’s Brief. The Court of Appeals likewise held that petitioner was not
sufficiently informs the appellate court of the alleged errors committed by the trial
denied due process when the RTC rendered its decision without his memorandum
court in its decision, including the manner of its rendition.
because:

It is our opinion that closing oral arguments of counsels and submission of "Although the brief of the appellant is not a literal compliance with the rules of
memorandum are not essential parts of the trial process for their only province is the court, nor is it a work of art from a professional point of view, still," this
to enlighten the court about the party’s position and the evidence supporting it. The Court held in Santos v. Rivera, "we do not believe the departure from the
rule quoted above does not make it mandatory for a trial court to allow arguments or prescribed practice has been so radical as to call for a dismissal of the case."
the filing of memoranda. Although they may in some instances be desirable they are
not however indispensable so that their absence does not fatally impair the validity of
the proceedings and the decision. Petitioner maintains that he was denied due process when the trial court proceeded
to decide the case, first, without the judge taking down notes and, second, without
waiting for his memorandum.
ISSUES:
Petitioner claims that during the retaking on June 2, 1992 of Atty. Totañes’ testimony,
Whether the petitioner was denied of due process when the trial court proceeded to Judge Alfredo C. Flores, Presiding Judge of the RTC, uttered statements confirming
decide the case: that he was unaware of the contents of the original testimony taken on January 30,
1. without the judge taking down notes; and 1987:
2. without waiting for his memorandum.
COURT:
RULING: There is no problem on the records that is now existing it is only on the transcripts, the
records that was not transcribed, that’s the problem, so how can we solve that.
ATTY. DADIOS:
1. NO. We did as far as this existing TSN which are certified original testimony of the witness,
we will adopt. . .
The contention has merit. In Luzon Stevedoring Corp. v. Court of Industrial Relations, COURT:
this Court admitted a petition for certiorari notwithstanding the absence of an
 It is adopted, it is there, because if that is your position, if you will require that to be Petitioner also misconstrues this Court’s ruling in Balagot, supra.  The gist of that
adopted and as you said it is not adopted, then he can cover many points you are ruling, echoed in numerous cases, is that a judge cannot plead the lack of the TSN to
implying that the counsel should adopt that so that he can limit. . . excuse delay in the rendition of judgment. Thus, judges are advised to take down
ATTY. DADIOS:
notes during the trial. Balagot  and similar cases did not make note-taking mandatory
Because, your honor, according to the last proceedings on record, that counsel has no
further cross-examine . . . upon judges, who may, at their own risk, choose not to take down notes. In the event
COURT: the stenographic notes are not transcribed and, as a result, the judge incurs delay in
The former direct examination, he can ask other matters, then if they were already rendering judgment, he faces administrative sanction - not for failure to take down
taken up then you can object. You are opening the gates on new matters, the problem notes but for delay in the rendition of judgment.
here is just to reproduce the testimony of this witness on cross-examination that were
not transcribed, how can we do that, nobody can say, that’s why . . .
2. NO. Petitioner’s argument has no basis. The 1964 Rules of Court, the procedure
then applicable, did not require the filing of memoranda. Rule 30 thereof provided:
Petitioner theorizes that when Judge Flores declared that "nobody can say" what the
missing transcript were all about, he in effect admitted that he was ignorant of the
SECTION 1. Order of trial. - Subject to the provisions of section 2 of Rule 31, and
material aspects of the testimony and that he failed to take down his own notes unless the judge, for special reasons, otherwise directs, the order of trial shall be as
purportedly in contravention of this Court’s directive in Balagot v. Opinion: follows:
....
The period within which to decide a case should be reckoned from the date a case (g) When the evidence is concluded, unless the parties agreed to submit the case
was submitted for decision. A delay on the transcription of stenographic notes cannot without argument, the plaintiff or his counsel may make the opening argument, the
be considered a valid reason for the delay in rendering judgment in a case. defendant, the third-party defendant, and fourth, etc., party, or their respective
Precisely, judges are directed to take down notes of salient portions of the hearing counsel, may follow successively, and the plaintiff or his counsel may conclude the
and proceed in the preparation of decisions without waiting for the transcript of argument. Two counsel may, if desired, be heard, upon each side, but in the order
stenographic notes. Furthermore, we have already ruled that with or without the herein prescribed.
transcribed stenographic notes, the 90 day period for deciding cases should be ....
adhered to. Administrative Circular No. 28 dated July 3, 1989 on the submission of memoranda
describes the nature of the requirement. "As a general rule," it states, "the submission
of memoranda is not mandatory or required as a matter of course but shall be left to
Petitioner has taken Judge Flores’ statements out of context. The Judge’s utterances the sound discretion of the court. A memorandum may not be filed unless required or
should be interpreted in light of the purpose for which the retaking of Atty. Totañes’ allowed by the court."
testimony was conducted, which was merely to complete the transcript so it may be
elevated to the Court of Appeals. Thus, when Judge Flores said that "nobody can Even under the 1997 Revised Rules on Civil Procedure, the requirement to file
say," he was merely emphasizing that the counsel’s questions and the witness’ memoranda is likewise optional upon the trial court. Rule 30 on trials states:
answers cannot be reproduced verbatim.
SEC 5. Order of trial. - Subject to the provisions of section 2 of Rule 31, and unless
The questioned remarks of the Judge cannot definitely be taken to mean that the court, for special reasons otherwise directs, the trial shall proceed as follows:
he did not know what took place at the earlier proceeding. At the very least, ....
Judge Flores would have some notion of the facts yielded by the cross-examination. (g) Upon admission of the evidence, the case shall be deemed submitted for decision,
The Rules of Court establishes an order in the examination of a witness. That order, unless the court directs the parties to argue or to submit their respective memoranda
quite logically, prescribes that the witness’ cross-examination by the opponent be or any further pleadings.
preceded by a direct examination of the proponent. The Rules further define the
purpose and extent of the cross-examination. The witness may be cross-examined The rationale for the foregoing rules is that a memorandum is merely a device to help
only as to any matters stated in the direct examination, or connected therewith, as the court in rendering its decision, the primary basis of which should be the evidence
well as all important facts bearing upon the issue. presented. Thus, in the case of Sps. Montecer v. Court of Appeals,  this Court held
that the CFI may not dismiss the appeal of the petitioner solely on the basis of the
In this case, Atty. Totañes testified on direct examination on the contents of party’s failure to file his memorandum because:
the Contract to Buy  and the effect of the Bank’s acceptance of the payments made by
petitioner on February 22, 1975 and November 25, 1976. The transcript of his Non-submission of memoranda is not part of the trial nor is the memorandum itself
testimony formed part of the record. Naturally, the Judge would have an idea of what essential, much less indispensable pleading before a case may be submitted for
was taken up on the succeeding cross-examination, which under the Rules could only decision. As it is merely intended to aid the court in the rendition of the decision in
accordance with law and evidence - which even in its absence the court can do on the
be matters stated in the direct examination, or connected therewith, or important facts
basis of the judge’s personal notes and the records of the case - non-submission
bearing upon the issue of rescission. More importantly, Judge Flores himself heard thereof has invariably been considered a waiver of the privilege.
the cross-examination of Atty. Totañes. It cannot be successfully argued, therefore,
that the Judge was completely ignorant of what transpired during that part of the trial.
In support of his contention that a memorandum is required, petitioner cites the work applied the payments represented by the subject receipts to the interest due. Under
of Supreme Court Justice Jose Y. Feria (Ret.) stating that, under the Revised Rules Article 1253 of the New Civil Code, if the debt produces interest, payment of the
on Civil Procedure: principal shall not be deemed to have been made until the interests have been
covered.
Oral Argument is no longer a matter of right after the admission of evidence. The court
has the discretion to direct the parties to argue orally or to submit memoranda. Petitioner has not, other than by his bare and self-serving allegations,
established that the receipts were issued for payments constituting the third
Petitioner’s argument is grounded on a gross misreading of the above excerpt. What installment. In a letter dated May 31, 1976, petitioner’s father even offered to pay
Justice Feria clearly refers to as no longer a matter of right under the 1997 Revised respondent Bank the balance of P20,000.00 on or before August 31, 1976. If it is true
Rules on Civil Procedure is the hearing of oral arguments, not the filing of that the payment of P17,500.00 made on February 22, 1975 covered part of the
memoranda. installment, then only the remaining balance of P2,500.00 was due respondent Bank.
Yet petitioner still offered to pay the entire amount of P20,000.00 after allegedly
having made the P17,500.00 payment to cover part of the third installment.
It is true that Judge Flores himself asked the parties to submit their respective
memoranda. Nevertheless, the rendition of judgment despite the absence thereof
does not constitute a denial of due process. Since, whether under the old or new Petitioner also claims that he had an agreement with the Bank’s lawyers that the
Rules on Civil Procedure, it is in the court’s discretion to order the parties to submit deposits made by petitioner’s father in his account were to be considered as
memoranda, it is also within its discretion to revoke such order. Thus, there is nothing payments in satisfaction of the third installment. Petitioner, however, has not proven
unusual in the action of the trial court. Perhaps, Judge Flores realized that he had a by a preponderance of evidence that he and the Bank had agreed to resort to a "debit
sufficient grasp of the evidence and the issues to enable him to resolve the case, memo" scheme to pay the sum due.
rendering the memoranda unnecessary. In such case, the trial court is simply deemed
to have dispensed with the memoranda that it had previously required. As petitioner failed to pay the third installment, respondent was entitled to rescind
the Contract to Buy. The contract provides the Bank two options in the event that
The essence of due process is a reasonable opportunity to be heard and petitioner fails to pay any of the installments. This was either (1) to rescind the
submit evidence in support of one’s defense. What the law proscribes, contract outright and forfeit all amounts paid by the petitioner, or (2) to demand the
therefore, is the lack of opportunity to be heard. As long as a party is given the satisfaction of the contract and insist on the full payment of the total price. After
opportunity to defend his interests in due course, he would have no reason to petitioner repeatedly failed to pay the third installment, the Bank again chose to
complain, for it is this opportunity to be heard that makes up the essence of due exercise the first option.
process. It is beyond dispute that petitioner participated in the trial. He was able to
adduce evidence in his behalf and given the opportunity to refute those of private Petitioner submits, though, that the bank waived its right to rescind since it allowed
respondents. Clearly, petitioner cannot complain that he was deprived of due petitioner-extensions to pay the third installment. Assuming that the Bank indeed
process. granted petitioner extensions to pay the last installment, such grants did not preclude
rescission of the contract. Failure on the part of petitioner to pay within the extension
Under the Contract to Buy, petitioner was supposed to pay respondent Bank the granted constituted delay and, therefore, another breach of the contract, again giving
amount of P20,000.00 covering the third installment on or before April 30, 1973. rise to respondent Bank’s right to rescind.
Petitioner was not able to pay said amount on the date stipulated. However, he made
payments in the amount of P17,500.00 on February 22, 1975 and P15,208.34 on Viewed in another light, the Contract to Buy is actually a contract to sell whereby the
November 25, 1976. On the face of the official receipts covering these amounts vendor reserves ownership of the property and is not to pass until full payment. Such
appear the words "penalties/interest charges." Petitioner insists, though, that he made payments as a positive suspensive condition, the failure of which is not a breach but
arrangements with the lawyers of the bank that these words were to be considered simply an event that prevents the obligation of the vendor to convey title from
mere "typographical errors" and that the amounts reflected as payments covering the acquiring binding force. Since ownership of the subject property was not to pass to
third installment. petitioner until full payment of the purchase price, his failure to pay on the date
stipulated, or in the extension granted, prevented the obligation for the Bank to pass
The amounts covered by the subject receipts cannot be considered payments for the title to the property to him from arising. Be it noted that as of April 30, 1973 which was
third installment. The contract states that where the Bank exercises the right to the deadline for the last installment, the balance of the principal stood at
demand full payment of the agreed total purchase price, the balance of the purchase P125,000.00.
price shall bear interest from May 1, 1973 at the rate of one percent (1%) per month
until fully paid. As petitioner failed to pay the third installment, petitioner was liable to However viewed, respondent Bank could validly sell the property to respondent
pay respondent Bank such interest. The accumulated interest from 1 May 1973 to 22 spouses. The right of respondent Bank to sell the property being unequivocal,
February 1975 amounted to P26,250.00 or much more than what petitioner paid on petitioner’s claims of bad faith on the part of respondent spouses have been rendered
the latter date. It may be safely assumed, therefore, that respondent Bank first irrelevant.
WHEREFORE, the petition is DENIED for lack of merit.