G.R. No. 124271 - SPS. RAMON AND SYLVIA CARRION, VS. COURT OF APPEALS, ELSA RAMIREZ AND BELEN GREGORIO.

Ruling

WHEREFORE, in the light of all the foregoing considerations, this Court orders the defendants, jointly and solidarily (sic), to pay both plaintiff Elsa Ramirez and Belen Gregorio the sum of P10,000.00 as and for attorneys fees; to pay the plaintiff Elsa Ramirez the sum of P60,000.00 without interest; to pay the plaintiff Belen Gregorio the sum of P60,000.00 without interest and to pay the costs of suit." [1] The trial court ruled that "while the evidence for both parties tended to show that the transaction between them involve the forbearance of money, x x x since the plaintiffs (private respondents) have admitted their funds were invested in the business of movie making, they should not be entitled to recover these funds because if that business deal had failed, as proven in an action for an accounting which plaintiffs should have instituted, then they should suffer the losses. Considering, however, that the defendants (petitioners) have not admitted that they have invested the funds of plaintiffs in the business of movie production but this court had earlier made the finding that defendants (petitioners) did receive the funds belonging to the plaintiffs (private respondents), then under the principle of unjust enrichment; defendants (petitioners) are legally bound to return those funds." [2] Aggrieved, petitioners appealed to the Court of Appeals. On 20 November 1995, the Court of Appeals rendered judgment, the dispositive part of which reads: "WHEREFORE, the appealed decision is AFFIRMED with the MODIFICATION that defendants are hereby declared solidarily liable to pay both plaintiffs the amount of P85,519.18 each, with the stipulated interest of 1% a month from November 28, 1986, the date of filing of the complaint until fully paid; twenty-five (25%) percent of such total amount inclusive of accrued interests for attorneys fees and expenses of litigation as stipulated in the promissory notes; and P5,000.00 moral damages." [3] The Court of Appeals disagreed with the trial courts conclusion that the contractual relation created between plaintiffs and defendants was one of partnership because the testimonial evidence on record did not establish that such was the intention of both parties. The parties did not "bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves," [4] so the CA held. According to the CA also, the evidence show that private respondents were "induced to part with their money and that defendants-appellants (petitioners) gained their trust and confidence as to their ability to return the money considering the anticipated success of the investment." [5] In fine, since the genuineness and due execution of the promissory notes were not denied by petitioners and parole evidence failed to establish any other agreement to the contrary, the documents clearly evinced a contract of simple loan, not that of a partnership, according to the CA. Petitioners are