TOPIC: Concept of Delivery
NFF INDUSTRIAL CORPORATION, vs. G & L ASSOCIATED BROKERAGE G.R. No.
178169, January 12, 2015
FACTS:
NFF was directed by the respondent to make deliveries of the bulk bags to Hi-
Cement which it did.
All the delivery receipts were rubber stamped, dated and signed by the security
guard on duty, as well as other representatives of respondent company.
All deliveries made were likewise covered by sales invoices.
However, the respondent counter that the ordered bulk bags were not delivered,
the same not having been received by the authorized representative in
conformity with the terms of the Purchase Order which specifically provides that
the bulk bags were to be delivered at Hi-Cement Corporation to Mr. Raul
Ambrosio, respondent company’s checker and authorized representative
assigned thereat.
ISSUE:
Whether or not there was a valid delivery considering that goods were not deliver
ed to the person specifically named in the purchase order.
RULING:
Yes. On despite the petitioner’s failure to strictly comply with the instruction to
deliver the bulk bags to the specified person, acceptance of delivery may be
inferred from the conduct of the respondents.
By allowing petitioner’s employee to pass through the guard-on-duty, who
allowed the entry of delivery into the premises of Hi-Cement, which is the
designated delivery site, respondents had effectively abandoned whatever
infirmities may have attended the delivery of the bulk bags.
As a matter of fact, if respondents were wary about the manner of delivery, such
issue should have been brought up immediately after the first delivery was made.
Instead, the manager even acknowledged the receipt thereof.
Therefore, respondent may be held liable to pay for the price of the bulk bags
pursuant to Article 1585 of the Civil Code, which provides that: “The buyer is
deemed to have accepted the goods when he intimates to the seller that he has
accepted them, or when the goods have been delivered to him, and he does any
act in relation to them which is inconsistent with the ownership of the seller, or
when, after the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them.”
FULL TEXT:
G.R. No. 178169 January 12, 2015
NFF INDUSTRIAL CORPORATION, Petitioner,
vs.
G & L ASSOCIATED BROKERAGE and/or GERARDO TRINIDAD, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision1 dated November 22, 2006 and the Order2 dated
May 22, 2007, respectively, of the Court of Appeals (CA), in the civil case entitled NFF
Industrial Corporation v. G & L Associated Brokerage, Inc. and/or Gerardo Trinidad,
docketed as CA-G.R. CV No. 85060.
The facts follow.
Petitioner NFF Industrial Corporation is engaged in the business of manufacturing bulk
bags, while respondent G & L Associated Brokerage, Inc. (respondent company) is
among its customers.3 Respondent Gerardo Trinidad is the general manager of
respondent company.4
According to petitioner, on July 20, 1999, respondent company ordered one thousand
(1,000) pieces ofbulk bags from petitioner, at Three Hundred Eighty Pesos (₱380.00)
per piece, or a total purchase price of Three Hundred Eighty Thousand Pesos
(₱380,000.00), payable within thirty (30) days from delivery, covered by Purchase Order
No. 97-002 dated July 29, 1999.5 In the said Purchase Order, an instruction was made
that the bulk bags were for immediate delivery to "G & L Associated Brokerage, Inc., c/o
Hi-Cement Corporation, Norzagaray, Bulacan."6 Shortly thereafter, respondent company
ordered an additional one thousand (1,000) pieces of bulk bags, thus for a total of two
thousand (2,000) pieces, at the same price per bag and with the same terms of
payment as well as the same instructions for delivery.7 Accordingly, petitioner made
deliveries of the bulk bags to Hi-Cement on the following dates and evidencedby the
following documents, to wit:
Units Date of Delivery
Amount Sales Invoices
Delivered Delivery Receipts
400 July 30, ₱152,000.00 No. 0226 dated July No. 4113 dated July
1999 30, 1999 30, 1999
1,000 August 4, ₱380,000.00 No. 0229 dated No. 4120 dated
1999 August 4, 1999 August 4, 1999
600 August 6, ₱228,000.00 No. 0231 dated No. 4122 dated
1999 August 6, 1999 August 6, 19998
2,000 ₱760,000.00
Petitioner alleged that the aforementioned deliveries were duly acknowledged by
representatives of respondent company.9 Petitioner also averred that all the delivery
receipts were rubber stamped,dated and signed by the security guard-on-duty, as well
asother representatives of respondent company.10 All deliveries made were likewise
covered by sales invoices.11
Based on the said invoices, the total sales price is Seven Hundred Sixty Thousand
Pesos (₱760,000.00).12 All the sales invoices were duly served upon, and received by
respondent company’s representative, one Marian Gabay.13
On the other hand, respondents alleged that on July 20, 1999, it ordered from
petitioner,by way of Purchase Order No. 97-002, one thousand (1,000) pieces of bulk
bags from petitioner at a unit price of (₱380.00) per piece for a total purchase price of
Three Hundred Eighty Thousand Pesos (₱380,000.00).14 The said bulk bags were to be
used by respondent company for the purpose of hauling cement from Hi-Cement
Corporation at Norzagaray, Bulacan, toa dam project in Casecnan, Nueva Ecija, the
respondent company having been designated as one of the many haulers at the Hi-
Cement Corporation.15 On July 26, 1999, respondent company formalized its offer
through a letter containing the same terms as the Purchase Order and providing for
other details regarding the purchase.16
According to respondents, the Purchase Order specifically provides that the bulk bags
were to be delivered at Hi-Cement Corporation to Mr. Raul Ambrosio, respondent
company’s checker and authorized representative assigned thereat.17 Subsequently,
however, the ordered bulk bags were not delivered to respondent company, the same
not having been received by the authorized representative in conformity with the terms
of the Purchase Order.18
Meanwhile, thirty (30) days elapsed from the time the last alleged delivery was made
but no payment was effected by respondent company.19 This prompted petitioner to
send a demand letter dated October 27, 1999 to respondent company.20 As respondent
company failed to respond to the demand letter, petitioner followed up itsclaim from the
former through a series of telephone calls.21 Again, since no concrete answer was
provided by respondent company, petitioner sent another demand letter dated
November 23, 1999; and finally, a third demand letter dated October 2, 2001.22 As the
demands remained unheeded, petitioner filed a complaint for sum of money against
respondents on December 19, 2001.23
As no settlement was reached during the pre-trial stage, trial proceeded. On January
25, 2005, the Regional Trial Court (RTC) rendered its decision in favor of petitioner. The
fallo of the Decision provides:
PRESCINDING FROM THE FOREGOING CONSIDERATIONS, judgment is hereby
rendered in favor of the plaintiff NFF INDUSTRIAL CORPORATION and against the
defendant Corporation G & L Associated Brokerage, Inc., and the latter is hereby
ordered to pay the plaintiff the following:
1. The sum of Php760,000.00 – representing overdue accounts plus interest from
the first demand on October 27, 1999 until fully paid.
2. The sum of Php152,000.00 as attorney’s fees.
3. Cost of suit.
SO ORDERED.24
Aggrieved, respondents appealed before the CA. As a result, the decision of the RTC
was reversed in the CA’s Decision25 dated November 22, 2006, in the following wise:
WHEREFORE, the appealed decision is, hereby, REVERSED AND SET ASIDE. The
Complaint against the appellant is perforce DISMISSED.
SO ORDERED.26
Undaunted, petitioner filed a Motion for Reconsideration. The same was, however,
denied in the assailed Order dated May 22, 2007.
Hence, this petition stating the following grounds:
PREPONDERANCE OF EVIDENCE SHOWS THAT THE RESPONDENT COMPANY
ACCEPTEDDELIVERY OF THE BULK BAGS.
II
RESPONDENTS’ CONDUCT PREPONDERANTLY SHOWS THAT DELIVERY OF
THE BULK BAGS HAS BEEN ACCEPTED.
III
FINDINGS OF FACT OF THE TRIAL COURT ARE ENTITLED TO GREAT WEIGHT.
IV.
TO SUSTAIN THE DECISION OF THE COURT OF APPEALS WILL CAUSE UNJUST
ENRICHMENT ON THE PART OF RESPONDENTS AT THE EXPENSE OF THE
PETITIONER.27
Simply, the issue before us is whether or not there was valid delivery on the part of
petitioner in accordance with law, which would give rise to an obligation to pay on the
part of respondent for the value of the bulk bags.
The question is basically factual since it involves an evaluation of the conflicting
evidence presented by the opposing parties, including the existence and relevance of
specific surrounding circumstances, to determine the truth or falsity of alleged facts.28
While it is well settled that factual issues are not within the province of this Court, as it is
not a trier of facts and is not required to examine or contrast the oral and documentary
evidence de novo, nevertheless, the Court has the authority to review and, in proper
cases, reverse the factual findings of lower courts in these instances: (a) when the
findings of fact of the trial court are in conflict with those of the appellate court; (b) when
the judgment of the appellate court is based on misapprehension of facts; and (c) when
the appellate court manifestly overlooked certain relevant facts which, if properly
considered, would justify a different conclusion.29 Considering that in the instant case,
the findings of the CAare contrary to those of the RTC, a minute scrutiny by this Court is
in order,and resort to duly proven evidence becomes necessary.30
Petitioner avers that it has delivered the bulk bags to respondent company, which
effectively placed the latter in control and possession thereof, as in fact, respondent
company had made use of the said bulk bags in the ordinary course of its business
activities.31 Conversely, respondents contend that the evidence on record miserably
failed to establish that the alleged deliveries were received by the authorized
representative of the respondents. Thus, there was no delivery at all in contemplation of
law.32
We find respondents' contention devoid of persuasive force.
The resolution of the issue at bar necessitates a scrutiny of the concept of "delivery" in
the context of the Law on Sales.33 Under the Civil Code, the vendor is bound to transfer
the ownership of and deliver, as well as warrant the thing which is the object of the
sale.34 The ownership of thing sold is considered acquired by the vendee once it is
delivered to him in the following wise:
Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it
is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other
manner signifying an agreement that the possession is transferred from the vendor to
the vendee.
Art. 1497. The thing sold shall be understood as delivered, when it is placed in the
control and possession of the vendee.
Thus, ownership does not pass by mere stipulation but only by delivery. 35 Manresa
explains, "the delivery of the thing x x x signifies that title has passed from the seller to
the buyer."36 Moreover, according to Tolentino, the purpose of delivery is not only for the
enjoyment of the thing but also a mode of acquiring dominion and determines the
transmission of ownership, the birth of the real right.37 The delivery under any of the
forms provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission
of ownership from vendor to vendee has taken place.38 Here, emphasis is placed on
Article 1497 of the Civil Code, which contemplates what is known as real or actual
delivery,when the thing sold is placed in the control and possession of the vendee.39
In Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., 40 the concept of
"delivery" was elucidated, to wit:
Delivery has been described as a composite act, a thing in which both parties must join
and the minds of both parties concur. It is an act by which one party parts with the title
toand the possession of the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means something in addition to
the delivery of property or title; it means transfer of possession. In the Law on Sales,
delivery may be either actual or constructive, but both forms of delivery contemplate
"the absolute giving up of the control and custody of the property on the part of the
vendor, and the assumption of the same by the vendee."41
Applying the foregoing criteria to the case at bar, We find that there were various
occasions of delivery by petitioner to respondents, and the same was duly
acknowledged by respondent Trinidad. This is supported by the testimony of petitioner’s
Sales Manager, Richard Agustin Vergamos, an excerpt thereof states:
DIRECT EXAMINATION
ATTY. CORALDE
Q: So, after getting the order of two thousand pieces (2,000 pcs.) and after
following the delivery instructions of Mr. Trinidad, after you agreed to the price of
three hundred eighty pesos per piece (₱380.00/pc) what happened next, if any,
Mr. Witness?
A: WE processed the order and as committed to him, we delivered the items few
days after the order.
COURT
Q: How many days?
A: Let me refer, your honor, to the document of the D.R.
xxxx
A: On July 30, 1999, we delivered four hundred pieces (400 pcs.) to Union
Cement Manufacturing Plant under the company name G & L Associated
Brokerage, your honor.
ATTY. CORALDE:
Q: So after your company delivered on July 30, 1999, what did you do next, if
any, Mr. Witness? A: After I was advised by our deliveryman, I immediately
called Mr. Trinidad that we were able todeliver only four hundred pieces (400
pcs.) of bulk bags.
Q: And what was his reaction to your report, Mr. Witness?
A: At first, I apologized because I was not able to make the five hundred pieces
required. So, in reply…
xxxx
ATTY. CORALDE
Q: So what was his reaction to your report that you delivered only four hundred
pieces (400 pcs) of bulk bags instead of five hundred pieces (500 pcs), Mr.
Witness?
A: He acknowledged our delivery and thanked me for delivering the item.
xxxx
Q: So, after the conversation with Mr. Trinidad, what happened next, in so far as
the second delivery, Mr. Witness?
A: And in that call, he followed-up to me the balance of delivery.
Q: So what did you tell him?
A: I told him that the two thousand pieces (2,000 pcs.) we agreed was already in
process in our production and the one thousand pieces (1,000 pcs.) is scheduled
to deliver a few days later.
xxxx
Q: No, my question is, who advised you that there was already delivery made on
August 4, 1999?
A: Our deliveryman advised me that they have already delivered the one
thousand pieces (1,000 pcs.) bulk bags to the Cement Manufacturing Plant.
Q: What did you do after receiving that information from your deliveryman?
A: After that advise[d], I called again Mr. Trinidad to inform him that we already
delivered one thousand pieces (1,000 pcs.) of bulk bags and he acknowledged
our delivery and thank me that I was able to deliver one thousand pieces (1,000
pcs.), sir.
xxxx
Q: Now, who advised you that there was a delivery of six hundred pieces (600
pcs.)?
A: Our deliveryman, sir.
Q: So, having been informed that, what did you do next, if any, Mr.
Witness?
A: And after advised I called again MR. Gerry Trinidad to inform of the delivered
six hundred pieces (600 pcs.) bags.
Q: And then what was his reaction, Mr. Witness?
A: He confirmed our delivery, sir.
Q: So after that, did you have any occasion to talk again personally to
Mr. Gerry Trinidad, Mr. Witness?
A: Yes, sir.
Q: When was this?
A: It was when the time I haveto submit the invoices, sir.
Q: What for these invoices are (sic), Mr. Witness?
A: These invoices have to be submitted to the customer for recognizing the
delivery, as wellas for collection purposes and payment of the orders, sir.42
Based on the foregoing, it is clear that petitioner has actually delivered the bulk bags to
respondent company, albeit the same was not delivered to the person named in the
Purchase Order. In addition, by allowing petitioner’s employee to pass through the
guard-on-duty, who allowed the entry of delivery into the premises ofHi-Cement, which
is the designated delivery site, respondents had effectively abandoned whatever
infirmities may have attended the delivery of the bulk bags. As a matter of fact, if
respondents were wary about the manner of delivery, such issue should have been
brought up immediately after the first delivery was made. Instead, Mr. Trinidad
acknowledged receipt of the first batch of the bulk bags and even followed up the
remaining balance of the orders for delivery.
Thus, the RTC correctly held that:
The evidence adduced by the parties clearly proved that Gerardo Trinidad himself,
initially ordered 1,000 pieces of NFF bulk bags at Php380.00 per piece from the plaintiff
on or about July 29, 1999. After testing and checking sample bags, Mr. Trinidad had
approved it and even instructed the Sales Manager of NFF in the person of Richard
Bergamo to place and print the bags with G & L logo as well as control number on all
our sides of bags and thereafter agreed to the quantity of Two Thousand [2,000] pieces
as what had been agreed upon during the meeting with the Union Cement Marketing
personnel atthe Cement manufacturing [TSN March 10, 2003, pp. 25]. Initial delivery of
400 pieces of bulk bags were made on July 31, 1999 and then followed by another
delivery of additional bulk bags on August 5, 1999 while the remaining 600 pieces of
bags were delivered on August6, 1999 to complete the 2,000 pieces ordered by the
defendant. All these deliveries were made to defendant’s designated address at "G & L
Associated Brokerage, Inc., C/O HI CEMENT CORPORATION, NORZAGARAY
BULACAN." These deliveries were made in compliance with Hi-Cement’s
standard/regular operating procedure. It passed thru guard on duty, who allowed the
entry of delivery into the premises of Hi-Cement, which is the designated delivery site
and then a representative of the defendant thereat received the delivered items in
behalf of the defendant.43
Respondents’ mere allegations ofnon-delivery and misdelivery deserve scant
consideration. On the matter of non-delivery, We find it bizarre that respondents failed in
demanding the delivery of the bulk bags despite its urgent need to procure the same, as
admitted by respondents’ witnesses. Customarily, failure to deliver the goods could
have prompted respondents to follow up on the orders and ensure that the same is
delivered at the earliest opportunity. In fact, if they had not actually received any
quantity of bulk bags, despite their alleged repeated demands, they could have
demanded in writing or resorted to legal action for the enforcement thereof. But there
was dearth of evidence showing the same. On the matter of misdelivery, when the
instruction todeliver the partial five hundred (500) pieces of bulk bags was made by Mr.
Trinidad, the latter did not even mention the name Ramil Ambrosio. The significance of
such condition, therefore, falls flat to the actual delivery made by petitioner at the
agreed delivery site. As testified by Mr. Vergamos, to wit:
DIRECT TESTIMONY
ATTY. CORALDE
Q: Now, Mr. Witness, where was the delivery of the bulk bags required for you by
Mr. Trinidad? A: I was instructed by Mr. Gerry Trinidad to deliver the partial five
hundred pieces (500 pcs.) bags toUnion Cement Manufacturing Plant in
Norzagaray, Bulacan, under the name G & L Associated Brokerage, sir.
Q: Did he advise you of specific person to whom this delivery should be made,
Mr. Witness?
A: He did not advise me of any person, sir.44
Interestingly, respondents presented the payroll of its employees wherein the name
Ramil Ambrosio appeared only in the payroll for the periods of July 16 to 31, 1999,
August 16 to 31, 1999 and September 16 to 30, 1999. However, for the period from July
30 to August 6, 1999, during which the deliveries were made, the name Ramil Ambrosio
does not appear in the payroll of respondent company.45 Thus, it is clear that during the
time the deliveries were made on the agreed dates and for which petitioner in fact
delivered the bags to respondent company, there was no Ramil Ambrosio to actually
receive the same as he obviously did not report for work.46
More importantly, in his testimony, respondent Trinidad categorically admitted receiving
the delivery receipts,which evince the actual delivery of the bulk bags, to wit:
DIRECT EXAMINATION
ATTY. RODRIGUEZ
Q: The plaintiff also presented other Delivery Receipts, Mr. Witness, one (1)
dated on August 4, 1999, No. 0229, previously marked as Exhibit "C" for the
plaintiff and another Receipt No. 0231 dated August 6, 1999, kindly go over
these Delivery Receipts, Mr. Witness, and inform us if you have seen this
Delivery Receipts before?
COURT
Q: The one with No. 0229 dated August 4, 1999, you saw it?
A: Yes, your honor, I have seen this.
Q: Where did you see it?
A: I have seen this before. This was attached to the billing they have sent us,
your honor.
Q: How about the other receipt, Mr. Witness, No. 0231?
INTERPRETER
Witness perusing over the document hand by the counsel.
A: Yes sir, I have already seen this sir.
Q: And on what occasion did you see this Delivery Receipt, Mr. Witness?
A: Thru the billing that they have sent to us, sir.
Q: In other words, you have copies of these delivery receipts?
xxxx
ATTY. RODRIGUEZ
xxxx
Q: Mr. Witness, you mentioned that you have seen these Delivery Receipts
before thru the invoices or billings sent to you by the plaintiff in this case, if these
receipts are shown to you, will you be able to identify them?
A: Yes, sir.47
Similarly, the corresponding sales invoices were duly served upon, and received by
respondent company’s representatives, as shown by the signatures of one Marian
Gabay, respondent Trinidad’s helper at his residence, who received the sales invoices
in behalf of respondent company.48 It is worthy to stress that from the time the copies of
the sales invoices were served on respondents and thereafter, respondents were never
heard to complain relative thereto.49
On this score, We agree with petitioner that it is rather confounding that respondents,
despite receipt,on various occasions, of the billing statements and delivery receipts,
failed to even call the attention of petitioner regarding the matter. 50 In the same vein,
despite the subsequent receipt of demand letters, receipt of which wereduly
acknowledged and admitted by respondents, the latter opted not to question or contest
the same, which is quite unusual and extremely inconsistent with its claim of non-
delivery of the bulk bags in question.51
At any rate, We find merit in petitioner’s argument that despite its failure to strictly
comply with the instruction to deliver the bulk bags to the specified person, acceptance
of delivery may be inferred from the conduct of the respondents. 52 Accordingly,
respondents may be held liable to pay for the price of the bulk bags pursuant to Article
1585 of the Civil Code, which provides that:
ARTICLE 1585. The buyer is deemedto have accepted the goods when he intimates to
the seller that he has accepted them, or when the goods have been delivered to him,
and he does any act in relation to them which is inconsistent with the ownership of the
seller, or when, after the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them.
As early as Sy v. Mina,53 it has been pronounced that the vendee’s acceptance of the
equipment and supplies and accessories, and the use it made of them is an implied
conformity to the terms of the invoices and he is bound thereby. 54 The Court in that case
also held that the buyer’s failure to interpose any objection to the invoices issued to it, to
evidence delivery of the materials ordered as per their agreement, should be deemed
as an implied acceptance by the buyer of the said conditions.55
Indeed, the use by respondent of the bulk bags is an act of dominion, which is
inconsistent with the ownership of petitioner. As correctly observed by the RTC, the use
of the bulk bags by respondents can be readily verified from the records of the case, to
wit:
The plaintiff’s witness affirmatively testified that the personnel of G & L Associated
Brokerage used the bulk bags by loading cement inside the bulk bags and it was lifted
by a forklift and lifted the same towards the truck belonging to G & L Associated
Brokerage [TSN May 12, 2003 pp. 13]. Case records even disclosed that the Exhibits L
and its submarkings which was identified by the plaintiff’s witness Richard Agustin
Bergamo who took the pictures himself evidentlyshowing that the defendant being the
haulers of the Union Cement, withdrew tonner bags from Union Cement Bulacan Plan
and used these tonner bags supplied by the plaintiff in hauling Union Cement intended
for CP Casecnan. The self-serving claim of Gerardo Trinidad that he was constrained to
make an order to some other suppliers due to alleged non-delivery of the tonner bags
likewise, deserved scant consideration. Defendant Gerardo Trinidad admitted having
used more than four thousand bags for the Casecnan Project but when asked to
produce copies of sales invoices and proof of purchase with respect to these alleged
suppliers in connection with Casecnan Project, said defendant miserably failed to
produce even a single proof and instead identified some delivery receipts covering the
period year 2000 contrary to his very claim that the bulk bags were urgently needed
sometime in July 1999 for the Casecnan Project.56
Also, the fact that respondent company was the sole user of the tonner bags at the
Bulacan Plant of Union Cement during the period pertinent to this case was duly proven
by the Certification issued by Union Cement Corporation, dated July 26,2002, that
respondent was the only sole user of tonner bags at Union Cement Bulacan Plant
intended for the CP Casecnan Project(Project) from August 1999 to June 2001. To
bolster this, the pictures taken at the premises of respondent company situated near the
Project clearly depict respondent company’s act of using tonner bags supplied by
petitioner, in hauling Union Cement intended for the Project.57
At this juncture, the overriding consideration is the evidence adduced that the bulk bags
delivered by petitioner at the Union Cement Plant were actually used by respondents,
and this Court cannot allow respondents to enrich themselves at the expense of
another.
Having received the aforesaid billings, the corresponding delivery receipts and demand
letters rendered by petitioner, respondents should have forthwith called the attention of
petitioner, if indeed, its insinuation that the bulk bags themselves have not been
delivered or misdelivered were true.58 In the ordinary course of business, in case of
unwarranted claims of payment of a sum of money, one would immediately protest the
same.59 But no such action was taken by respondents despite notice thereof.60 Only
when respondents were required by the RTC to submit an answer to the complaint were
they constrained to contest the claims of petitioner. If respondent were to be defeated
only by its failure toeffect delivery to the designated representative of respondent, the
latter would inevitably be unjustly enriched at the expense of the former.61
If at all, respondents’ failure to pay the purchase price may have been due to lack of
funds rather than non-delivery or misdelivery of the bulk bags. On cross-examination,
Aurelio L. Gomez, petitioner’s general manager, testified that respondents admitted
after the third delivery that they were postponing the payment because theyhave no
money to pay. Thus:
CROSS-EXAMINATION
ATTY. RODRIGUEZ:
Q: How about the other officers of the corporation, did you inquire from them?
A: Not me personally sir, but my credit collector.
Q: Did you inquire from them whatwas the result of the inquiry?
A: This was after the third delivery was made when they said that they have no
money to pay that is why they were postponing the payment sir.62
Sifting through the testimony of the witnesses and the evidence submitted, the evidence
of petitioner preponderantly established that there was valid delivery of bulk bags, which
gives rise to respondent company’s corresponding obligation to pay therefor. By
preponderance of evidence is meant that the evidence adduced by one sideis, as a
whole, superior to that of the other side.63 Essentially, preponderance of evidence refers
to the comparative weight of the evidence presented by the opposing parties.64 As such,
it has been defined as "the weight, credit, and value of the aggregate evidence on either
side," and is usually considered to be synonymous with the term greater weight of the
evidence or greater weight of the credible evidence.65 It is proof that is more convincing
to the court as worthy of belief than that which is offered in opposition
thereto.66 Contrary to respondents’ view, We find that petitioner has successfully
established its case. Accordingly, We give greater weight, credit and value to its
evidence.
Finally, with regard to the liabilityof respondent Trinidad, we adopt with approval the
findings of the RTC that he was merely being sued in his capacity as General Manager
of respondent company.67 Since there was no showing of any of circumstances
warranting the piercing the veil of corporate fiction, he cannot be held jointly and
severally liable for the outstanding obligation of respondent company. 68 As held in
Kukan International Corporation v. Reyes,69 citing an earlier case, those who seek to
pierce the veil must clearly establish that the separate and distinct personalities of the
corporations are set up to justify a wrong, protect fraud, or perpetrate a deception, to
wit:
The same principle was the subject and discussed in Rivera v. United Laboratories,
Inc.:
While a corporation may exist for any lawful purpose, the law will regard it as an
association of persons or, in case of two corporations, merge them into one, when its
corporate legal entity is used as a cloak for fraud or illegality. This is the doctrine of
piercing the veil of corporate fiction. The doctrine applies only when such corporate
fiction is used to defeat public convenience, justify wrong, protect fraud, or defend
crime, or when it is made as a shield to confuse the legitimate issues, or where a
corporation is the mere alter ego or business conduit of a person, or where the
corporation is so organized and controlled and its affairs are so conducted as to make it
merely an instrumentality, agency, conduit or adjunct of another corporation.
To disregard the separate juridical personality of a corporation, the wrongdoing must be
established clearly and convincingly. It cannot be presumed. (Emphasis supplied.)70
All told, We find reason to overturn the findings of the CA and affirm the decision of the
trial court.1âwphi1 Accordingly, respondent is hereby ordered to pay petitioner the sum
of Seven Hundred Sixty Thousand Pesos (₱760,000.00), representing overdue
accounts plus interest from the first demand on October 27, 1999 until fully paid in
accordance with the doctrine laid down in Eastern Shipping Lines v. Court of
Appeals,71 then later on in Nacar v. Gallery Frames,72 as well as attorney’s fees.73
At this juncture, it is well to note that under Nacar, in the absence of stipulation by the
parties, the judgment obligor shall be liable to pay six percent (6%) interest per annum
to be computed from default, i.e.,judicial or extrajudicial demand pursuant to the
provisions of Article 1169 of the Civil Code.74 Furthermore, when the judgment of the
court awarding the sum of money becomes final and executory, the rate of legal interest
shall be six percent (6%) per annum from such finality until its satisfaction, 75 taking the
form of a judicial debt.
WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2006 and
the Order dated May 22, 2007, respectively, of the Court of Appeals are hereby
REVERSED and SET ASIDE. The Decision of the Regional Trial Court, dated January
25, 2005, is hereby AFFIRMED with MODIFICATION to the effect that legal interest
shall be awarded to petitioner at the following rates:
a) For the period of October 27, 199976 to June 30, 2013,77 the interest rate of
twelve percent (12%) per annum shall be imposed, compounded annually;
b) For the period of July 1, 201378 up to the day prior to the date of promulgation
of this Decision, the interest rate of six percent (6%) per annum shall be
imposed, compounded annually; and
c) From the date of promulgation of this Decision up to full payment, a straight six
percent (6%) interest per annum shall be imposed on the sum of money plus the
interest computed under paragraph (a) and (b) above.79
SO ORDERED.
