SECOND DIVISION
PHILIPPINE
PHOSPHATE G.R. No. 165608
FERTILIZER
CORPORATION,
Petitioner,
Present:
QUISUMBING,
J.,
Chairperson,
-
versus - AUSTRIA-MARTINEZ,*
CARPIO
MORALES,
TINGA,
and
VELASCO, JR., JJ.
KAMALIG
RESOURCES, INC.,
Respondent. Promulgated:
x -----------------------------------------------------------------------------------
x
D E C I S I O N
Tinga, J.:
This
is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the
Decision[1]
dated
The
factual and legal antecedents follow.
Kamalig
purchased fertilizer products from Philphos for eventual sale to its
customers. The agreement governing the
business transaction consisted of advance payment to Philphos for Kamalig’s
purchases of fertilizer products, followed by Philphos’s issuance of a Sales
Official Receipt and an Authority to Withdraw, indicating the kind of fertilizer
product purchased and the location of the warehouse where the merchandise would
be picked up. Kamalig would subsequently
resell the fertilizer products and issue to its customers the corresponding
Delivery Orders signed only by its authorized officers. The customers would then present the Delivery
Orders to the proper Philphos warehouse for the release of the fertilizer
products.
On
P4,548,152.53,
embodied in Sales Official Receipt No. 03539,[3] covering
the following commercial invoices: (a) Commercial Invoice (CI) No. 04891 for
fertilizer products to be withdrawn from the warehouse in Poro Point; (b) CI
No. 04892 for fertilizer products to be withdrawn from the Manila supply point;
(c) CI No. 04893 for such products to be withdrawn from the Iloilo warehouse;
and (d) CI No. 04894 for the products to be withdrawn from the Davao supply
point.[4]
Prior
to the release of fertilizer products at the said supply points, however,
Kamalig requested for a readjustment of the various fertilizer grades and a modification
of the locations from which the fertilizer stocks would be picked up. The request was contained in a letter dated
In
a subsequent letter dated
All
these requests were approved by Philphos.
In
the letter dated P1,016,994.21. But since Philphos also had an obligation to
Kamalig in the amount of P470,348.91 representing the Capital Recovery
Component, partial compensation took place by operation of law thereby reducing
Kamalig’s obligation to P546,645.30.
Thus, Philphos demanded that this sum be settled on or before
On P441,738.50
from Philphos’s warehouse in Iloilo and 291.45 MT or 5,829 bags of fertilizer
grade 21-0-0 amounting to P575,255.71 from Philphos’s warehouse in
Manila.[8]
After trial, giving more credence to
the evidence presented by Philphos, the RTC disposed of the case in its
Decision[9] dated
In the light of the foregoing, judgment is hereby
rendered as follows:
1)
Ordering
defendant to pay plaintiff the amount of P546,645.30 representing the
overwithdrawn stocks made by defendant to plaintiff plus 34% interest per annum
from 20 August 1987 until fully paid;
2)
Ordering
defendant to pay plaintiff an amount equivalent to 25% of the total claim as
and for attorney’s fees; and
3)
Ordering
defendant to pay the costs of suit.
SO ORDERED.[10]
The RTC noted that Kamalig did not
categorically deny that there were overwithdrawals of fertilizer products in
its stock, and that if there were overwithdrawals, Kamalig merely claimed that
it should not be at fault because some of the delivery receipts were signed by
Kamalig officers who were not authorized to make such withdrawals. However, the RTC held that the alleged
unauthorized withdrawals did not relieve Kamalig from liability for the
following reasons: first, Kamalig’s
policy of not allowing withdrawals via handwritten forms or forms that are not
pre-printed or pre-numbered was not communicated to Philphos but was only an
internal company policy; second, if it is Kamalig’s internal policy not to
allow withdrawals by unauthorized officers, then it should have been followed
by all of its employees, and the withdrawals by such unauthorized officers only
goes to show that said procedure is actually not an internal policy of
Kamalig. Therefore, such withdrawals
should be for the account of Kamalig.[11]
Kamalig appealed the decision to the
Court of Appeals, which found merit in the appeal. The dispositive portion of the Decision dated
WHEREFORE,
the assailed Decision is REVERSED and
SET ASIDE. The complaint is DISMISSED and judgment is rendered ordering Philippine
Phosphate Fertilizer Corporation to pay Kamalig Resources, Inc., the following:
1.
Actual damages in
the sum of P470,348.91, representing the value of the Capital Recovery Component,
plus legal interest from the date of the filing of the Complaint;
2.
Actual damages in
the sum pf P174,841.34, representing the value of unauthorized
withdrawals erroneously charged to Kamalig Resources, Inc.;
3.
Attorney’s fees
in the amount of P30,000.00; and
4.
The costs of
suit.
SO ORDERED.[12]
The
Court of Appeals disagreed with the RTC’s finding that Kamalig failed to
categorically deny Philphos’s claim of overwithdrawal of fertilizer
stocks. The appellate court pointed out
that there were specific denials in Kamalig’s Answer that it had not
overwithdrawn its stocks, and in its Pre-Trial Brief that it had withdrawn
fertilizer stocks only in such grade and quantity equivalent to the payment it
had previously made. A categorical
denial having been made by Kamalig, the Court of Appeals declared that the
burden of proof had shifted to Philphos to prove such overwithdrawals.[13] The Court of Appeals found, however, that Philphos
did not overcome the burden of proof as it failed to prove the alleged overwithdrawal
of fertilizer products by Kamalig which is the core of its cause of
action. The Court of Appeals also found
that Philphos’s computations not only included improperly documented
withdrawals but also violated Kamalig’s policy of authorizing withdrawals based
only on pre-printed and numbered forms duly issued to its customers,
which policy according
to the Court of Appeals, was
communicated by Kamalig to
Philphos. The Court of Appeals likewise
found that it was also Philphos’s company policy to disallow withdrawals not
using the pre-numbered and pre-printed delivery receipts. By adopting the same policy, the appellate
court declared, Philphos should have been forewarned that allowing withdrawals
without the proper documentation would be abetting unauthorized withdrawals to
its prejudice. Thus, such unauthorized
withdrawals should also be deducted from the value of the fertilizer products withdrawn
by Kamalig.[14]
Consequently, the unauthorized
withdrawals, in the total amount of P378,891.45,[15]
should be deducted from the total withdrawals made by Kamalig as stated in the
delivery receipts, placed at P4,752,202.62, thereby leaving a difference
of P4,373,311.21. Said difference
should then be deducted from the purchase price of P4,548,152.55
previously paid by Kamalig, leaving an overpayment of P174,841.34 by Kamalig. Add to this the amount of P470,348.91
representing the Capital Recovery Component which Philphos admitted it owed
Kamalig, resulting in the total amount of P645,190.25 owed by Philphos
to Kamalig, said the Court of Appeals.
|
Total value of withdrawals made by
Kamalig |
|
|
Less: Value of unauthorized
withdrawals |
- 378,891.41 |
|
Actual value of withdrawals made by
Kamalig |
|
|
|
|
|
Amount previously paid by Kamalig |
|
|
Less: Actual value of withdrawals
made by Kamalig |
- 4,373,311.41 |
|
|
174,841.34 |
|
Add: Capital Recovery Component |
+
470,348.91 |
|
TOTAL AMOUNT owed by Philphos to
Kamalig |
|
The Court of Appeals likewise held
that there was no basis for the imposition of the 34% interest per annum on the
principal claim of Philphos, the same being merely a unilateral act on the part
of Philphos and no evidence was presented to show that the parties stipulated
on the payment of interest. Besides,
such interest cannot be awarded since there were no overwithdrawals in the
first place. The Court of Appeals also
deleted the award of attorney’s fees to Philphos, finding that the factual and
legal bases of the RTC were erroneous and that Philphos had not met any of the
justifications under Article 2208 of the Civil Code to merit the award of
attorney’s fees. Instead, it awarded
attorney’s fees to Kamalig which was forced to hire the services of a lawyer to
defend itself against an unfounded civil action filed by Philphos that could
have been avoided had Philphos been more diligent.[17]
Philphos filed a motion for reconsideration
of the Decision but this was denied in the Resolution[18]
of
In the present appeal by certiorari,
Philphos alleges that the Court of Appeals erred in holding that: (a) Philphos is liable to Kamalig for the sum
of P645,190.29, considering that based on Philphos’s evidence, it is
Kamalig who is indebted to Philphos for the sum of P538,486.74; (b)
Philphos’s evidence is not sufficient to prove the existence of an outstanding
obligation; (c) there can be no basis for the imposition of a 34% interest per
annum on the outstanding obligation of Kamalig to Philphos; and (d) there is no
basis for awarding attorney’s fees to Philphos.
Philphos alleges that in issuing the
questioned decision, the Court of Appeals omitted some figures and disregarded
some material facts which, when taken into account, would have established
Kamalig’s liability by as much as P538,486.73. First, in coming up with the value of P645,190.25
supposedly owed by Philphos to Kamalig, the Court of Appeals erroneously
indicated that Kamalig had withdrawn 1,908.85 MT of fertilizer grade 21-0-0,
150 MT of fertilizer grade 16-20-0 and 150 MT of fertilizer grade 14-14-14, or
a total of 2,208.85 MT. In doing so, the
Court of Appeals did not consider Kamalig’s withdrawals in the other warehouses
of Philphos, such as 37.15 MT of 16-20-0 fertilizer grade in Poro Point and 100
MT each of fertilizer grades 14-14-14 and 16-20-0 in Manila per Kamalig’s
letter dated 11 October 1985. Thus, the
appellate court’s computation was short by 237.15 MT worth P803,710.55:[19]
|
Fertilizer Grade |
Quantity in Metric Tons |
Price/MT |
amount |
|
14-14-14 |
100 |
3,499.10 |
|
|
16-20-0 |
137.15 |
3,308.79 |
453,800.55 |
|
Total |
237.15 |
|
|
Second,
the Court of Appeals supposedly should not have readily believed Kamalig’s
claim that the withdrawals based on handwritten delivery orders or those that
were not pre-printed and pre-numbered were unauthorized. The evidence presented by Philphos clearly
showed that said alleged unauthorized withdrawals amounting to P378,891.41
were sufficiently evidenced by delivery orders signed by Kamalig’s authorized
signatories and were received by Kamalig’s customers. Philphos asseverates that it should not be
faulted for honoring the delivery orders that were not written on the standard
pre-printed forms. While Kamalig asserts
that it communicated its policy of disallowing withdrawals in non-standard
forms, Kamalig’s own witness and former company president, Ma. Lourdes
Nicandro, testified that the policy was not communicated officially through a
formal written memorandum or letter.
Moreover, the handwritten delivery orders signed by Kamalig’s authorized
officers would negate the existence of such a policy since said officers are
presumed to be knowledgeable about Kamalig’s policies and accordingly comply
with the same.[20]
Third,
the Court of Appeals should have included in its computation the additional
deliveries to Kamalig of 292 MT of fertilizer grade 21-0-0 in
Thus,
according to Philphos’s computations, the fertilizer products withdrawn by Kamalig totals 2,446.55 MT equivalent
to P5,556,988.20. Deducting
Kamalig’s deposit of P4,548,152.55 and capital recovery component of P470,348.91,
Kamalig owes Philphos the amount of P538,486.74:
|
Fertilizer
Grade |
Poro Point |
|
|
Total mt |
Cost/MT |
TOTAL |
|
14-14-14 |
- |
100 |
100 |
250 |
3,499.10 |
|
|
16-20-0 |
37.15 |
100 |
150 |
287.15 |
3,308.79 |
950,119.05 |
|
21-0-0 |
- |
1,709.4 |
200 |
1,909.4 |
1,954.59 |
3,732,094.15 |
|
Total
|
37.15 |
1,909.4 |
450 |
2,446.55 |
|
|
|
Total
value of fertilizer withdrawn |
|
|
Less:
Amount previously paid by Kamalig |
- 4,548,152.44 |
|
|
1,008,835.65 |
|
Less:
Capital Recovery Component |
-
470,348.91 |
|
TOTAL
AMOUNT owed by Kamalig to Philphos |
|
Since
Kamalig’s obligation is sufficiently established, Philphos adds that Kamalig is
also liable to pay 34% interest per annum as stated in Philphos’s demand
letters dated
Lastly, Philphos argues that owing to
Kamalig’s refusal to pay, Philphos was constrained to institute the instant
case and incurred an obligation in the sum equivalent to 25% of the total claim
as and for attorney’s fees at P1,000.00 per appearance, as testified to
by Philphos’s witness, Ms. Vida Delute.
Thus, citing Article 2208 of the Civil Code, Philphos contends that it
should recover attorney’s fees.[22]
On the other hand, Kamalig, in its
Comment[23]
dated
The petition is not meritorious, but
we find that the decision of the Court of Appeals needs to be modified in
certain aspects.
True it is that the jurisdiction of
this Court in a petition for review under Rule 45 is limited to reviewing
errors of law since it is not a trier of facts and it is a settled doctrine
that findings of fact of the Court of Appeals are binding and conclusive upon
this Court, as a general rule.[24] In the case at bar, however, two exceptions
to the general rule are present. These
are when the findings of the Court of Appeals are contrary to those of the
trial court and when the Court of Appeals fails to consider certain facts which
would result in a different conclusion.
The complaint for a sum of money
filed by Philphos arose from Kamalig’s refusal to pay the amount of P575,255.71
of alleged overwithdrawals of fertilizer products from Philphos’s P4,548,152.53 worth of fertilizer products to be
picked up at different supply points or warehouses of Philphos. According to the CIs,[25] Kamalig purchased the following quantities in metric tons of fertilizer products and paid
the corresponding amounts:
|
Fertilizer
Grade |
Poro Point |
|
|
|
Total mt |
Cost/MT |
TOTAL |
|
14-14-14 |
- |
- |
200 |
150 |
350 |
3,499.10 |
|
|
16-20-0 |
300 |
- |
200 |
150 |
650 |
3,308.79 |
2,150,713.50 |
|
21-0-0 |
175 |
250 |
100 |
75 |
600 |
1,954.59 |
1,172,754.00 |
|
|
|
|
|
|
|
|
|
A readjustment of the quantities of
fertilizer products and pick up points was made in Kamalig’s letter dated
|
Fertilizer
Grade |
Poro Point |
|
|
|
Total mt |
Cost/MT |
TOTAL |
|
14-14-14 |
- |
100 |
100 |
- |
200 |
3,499.10 |
|
|
16-20-0 |
37.15 |
100 |
100 |
- |
237.15 |
3,308.79 |
784,679.54 |
|
21-0-0 |
- |
1,417.4 |
150 |
- |
1,567.4 |
1,954.59 |
3,063,624.30 |
|
|
|
|
|
|
|
|
|
The letter clearly indicates that
there were no more stocks for pick up in
However,
another request for readjustment was made by Kamalig through its letter dated
14-14-14 50 MT P174,955.00
16-20-0 75 MT
248,159.25
21-0-0 75
MT 146,594.25
P569,708.50
Converted
to:
21-0-0 292
MT P570,740.28[26]
This request was granted and the
authority to withdraw was issued accordingly.
Philphos claims it granted the request inadvertently, believing as it
did that Kamalig still had stocks in
Philphos presented evidence to show
the withdrawals made by Kamalig from the
Kamalig claims that some of the
withdrawals from the
The pre-printed delivery orders are a
vital security measure to prevent unauthorized withdrawals of fertilizer, and
benefits not only Kamalig but Philphos as well.
As Kamalig explains in its Comment, the pre-printed and pre-numbered
forms were so designed in such a way that the person dealing with it will be
informed that the delivery order is duly issued by Kamalig and can be relied
upon; corollarily, if the customer presents a delivery order that is not in the
prescribed pre-printed form, the person dealing with it should be alerted that it
was not issued according to standard company practice and anyone acting upon it
acts at his own risk.[31] The practice of using these pre-printed delivery
orders is obviously the modality in the ordinary course of business between
Kamalig and Philphos. Philphos’s failure
to strictly observe and implement this practice precludes it from complaining
of the adverse effects of such failure.
In the case at bar, withdrawals of
fertilizer in quantities more than what was paid for was made possible by
Philphos’s failure to comply with the policy to use the prescribed forms. The danger sought to be prevented by the policy
came to pass because of Philphos’s non-compliance with its policy. It is of no moment that Kamalig’s own
authorized signatory, Mr. Supetran, Jr., accomplished the handwritten delivery
orders, since the withdrawals thereon would not have been made had Philphos strictly
implemented the policy and did not honor said delivery orders. As Philphos could have prevented the loss, it
is but fair that it should suffer the loss.
Thus, the value of the unauthorized withdrawals should be for the
account of Philphos and not shifted to Kamalig.
The total value of the unauthorized withdrawals in P378,891.41, per the
handwritten delivery orders, as follows:
|
Fertilizer
Grade |
Total mt |
Cost/MT |
TOTAL |
|
14-14-14 |
25 |
3,499.10 |
|
|
16-20-0 |
29 |
3,308.79 |
95,954.91 |
|
21-0-0 |
100 |
1,954.59 |
195,459.00 |
|
|
|
|
|
As to the alleged overwithdrawal of stocks
in the Manila warehouse, Philphos presented Delivery Receipts[32]
which showed that a total of 291.45 MT of fertilizer grade 21-0-0 valued at P569,665.25
was made in accordance with the letter of 14 October 1985. Philphos did not present the delivery receipts
covering all the withdrawals in the
It appears, however, that the
representative of Kamalig who signed the Certification and Summary, Marketing
Assistant Ma. Veronica Porciuncula, was not authorized to make or sign such
certifications or summaries or to make any reconciliation of the records of
fertilizer withdrawals, the same not being part of her functions as marketing
assistant.[35] Even Mr. Garcia admitted that Ms. Porciuncula
did not present any written authority to sign the Certification and Summary in
behalf of Kamalig.[36] Thus, the Certification and Summary cannot be
used to prove the delivery and receipt by Kamalig of the 1,417.4 MT of
fertilizer grade 21-0-0 separate and distinct from the 291.45 MT of the same
fertilizer grade withdrawn in accordance with the
Thus, Philphos presented proof of
overwithdrawal only from the
In its computations, the Court of
Appeals arrived at the total value of withdrawals made by Kamalig, pegged at P4,752,202.62,
by considering only the withdrawals of fertilizer grade 21-0-0 in Manila and of
all fertilizer grades in Iloilo, i.e., by summing up all the amounts in
the receipts presented by Philphos. The
problem with this tack is that the delivery receipts represent only some but
not all of the withdrawals made. In
doing so, the Court of Appeals failed to consider the withdrawals of fertilizer
grade 16-20-0 in Poro Point and of fertilizer grades 14-14-14 and 16-20-0 in P4,548,152.50 made by Kamalig covered and served as payment
for all three kinds of fertilizers to be taken from supply points in Poro
Point,
Since the Court of Appeals considered
all the receipts in coming up with the total withdrawals, it also took into
account the alleged overwithdrawal of 291.45 MT of 21-0-0 fertilizer grade in P4,986,247.92, and not just P4,752,202.62,
computed as follows:
|
Fertilizer
Grade |
Poro Point |
|
|
|
Total mt |
Cost/MT |
TOTAL |
|
14-14-14 |
- |
100 |
150 |
- |
250 |
3,499.10 |
|
|
16-20-0 |
37.15 |
100 |
150 |
- |
287.15 |
3,308.79 |
950,119.05 |
|
21-0-0 |
- |
1,417.4 |
200 |
- |
1,617.4 |
1,954.59 |
3,161,353.87 |
|
|
|
|
|
|
|
|
|
From the total withdrawals, the
unauthorized withdrawals of P378,891.41 from the P4,607,356.51
would then represent the actual withdrawals from which Kamalig’s advance
payment of P4,548,152.44 should be deducted, leaving only P59,204.07
representing the overwithdrawals in P470,348.91
as Capital Recovery Component, Kamalig’s liability of P59,204.07 should
be deducted from this amount, leaving P411,144.84 which Philphos still owes
Kamalig, and not P645,190.25[37]
as found by the Court of Appeals.
Thus:
|
Total
value of fertilizers withdrawn |
|
|
Less:
Unauthorized withdrawals in |
- 378,891.41 |
|
|
4,607,356.51 |
|
Less:
Amount previously paid by Kamalig |
- 4,548,152.41 |
|
Amount
owed by Kamalig |
59,204.07 |
|
|
|
|
Capital
Recovery Component |
|
|
Less:
Amount owed by Kamalig |
-
59,204.07 |
|
TOTAL
AMOUNT owed by Philphos to Kamalig |
|
With respect to the 34% per annum
interest claimed by Philphos, we agree with the Court of Appeals that no
evidence was presented that would show that the parties stipulated on the
payment of interest. Under Article 1956
of the Civil Code, no interest shall be due unless it has been expressly
stipulated in writing. Philphos
presented only its demand letters[38] insisting
on payment of the value of the overwithdrawals and imposition of 34% interest
per annum if payment is not made in due time.
Said unilateral impositions of interest do not suffice as proof of
agreement on the alleged 34% per annum interest.
Philphos claims attorney’s fees under
Article 2208 of the Civil Code which provides that attorney’s fees may be
granted where “the defendant acted in gross and evident bad faith in refusing
to satisfy the plaintiff’s plainly valid, just and demandable claim.” Suffice it to say the evidence does not bear
out any gross and evident bad faith on the part of Kamalig.
As to the Court of Appeals’ award of
attorney’s fees to Kamalig, it appears that the award was granted under the
auspices of Art. 2208, par. (4) of the Civil Code which provides that
attorney’s fees may be recovered “in case of a clearly unfounded civil action
or proceeding against the plaintiff”—or in this case, against then defendant
Kamalig—since the appellate court reasoned that Kamalig was compelled to hire
the services of a lawyer to defend itself.
In this case, overwithdrawals of fertilizer products in
WHEREFORE, in view of the foregoing,
the Decision dated P411,144.84, plus legal interest from the finality of this
Decision,[41] and
costs of the suit. The award of attorney’s
fees by the Court of Appeals in favor of respondent is DELETED.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ CONCHITA CARPIO MORALES
Associate
Justice Associate Justice
PRESBITERO J. VELASCO,
JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
*As replacement of Justice Antonio T. Carpio
who inhibited himself from the case for being a former counsel of a party, per
Administrative Circular No. 84-2007.
[1]Rollo, pp. 32-45. Penned by Associate Justice Mariano C. del Castillo and concurred in by Associate Justices Marina L. Buzon and Magdangal M. de Leon of the Fourteenth Division.
[15]Representing the value of fertilizer stocks that were withdrawn using handwritten requests and not the pre-printed and pre-numbered Delivery Orders prescribed by Kamalig. See Exhibits “C,” “C-1,” “C-3,” “E-2,” “G-3,” and “G-4,” id. at 67, 68, 70, 83, 94 and 95, respectively.
[24]Such factual findings shall not be disturbed
unless: (1) the conclusion is a finding
grounded entirely on speculations, surmises, or conjectures; (2) the inference
made is manifestly mistaken, absurd, or impossible; (3) there is grave abuse of
discretion; (4) the judgment is based on a misapprehension of facts; (5) the
findings of fact are conflicting; (6) the Court of Appeals, in making its
findings, went beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee; (7) the findings of the Court
of Appeals are contrary to those of the trial court; (8) the findings of fact
are conclusions without citation of specific evidence on which they are based;
(9) the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a
different conclusion; and (10) the findings of fact of the Court of Appeals are
premised on the absence of evidence and are contradicted by the evidence on
record. Litonjua, Jr. v. Eternit
Corporation, G.R. No. 144805,
[25]Records, pp. 5-8. Exhibits “A-1,” to “A-4.”
[27]Records,
pp. 66, 71-80, 84-90, and 96-103, respectively.
Exhibits “D,” “D-1” to “D-17,” “F” to “F-13,” and “H” to “H-13.”
[28]
[29]