"21 (1/200) Uniplus at P3,500.00 per Drum P73,500.00
Personal Loan from E.V. Quebral 18,404.73
————
Total Accountability due URC &/or E.V. Quebral P91,904.73"
In the promissory note dated July 19, 1985 appended to the aforesaid letter Gay-ya obligated himself to pay the total amount of P91,904.73 to private respondent under a schedule of payments showing that the payments would be made between August 30, 1985 and May 30, 1986. Both the promissory note and the schedule of payments bore the signature of petitioner under the word "Conforme."cralaw virtua1aw library
On April 11, 1988, the trial court denied Gay-ya’s motion to dismiss and to lift the attachment. On April 19, 1988, private respondent move that petitioner filed an answer with counter-claim.
In his answer, petitioner categorically denied that he was a business partner of Gay-ya but admitted that he was Gay-ya’s erstwhile co-employee at the Getty Oil Philippines. He averred that Gay-ya "transacted business" with private respondent without his knowledge and consent while using his "good name and credit standing" with private Respondent. He asserted that he did not benefit from the business transactions between private respondent and Gay-ya and denied that he was leaving the country to abscond. He interposed a counter-claim against private respondent for the "malicious and groundless action" brought against him which allegedly caused him mental anguish. He therefore prayed for reasonable damages plus attorney’s fees aside from the cross-claim for damages he filed against Gay-ya.
Upon motion of private respondent, Gay-ya was declared in default in the order of June 17, 1988.
In its order of September 23, 1988, the trial court granted petitioner’s motion to lift the order of attachment citing as reasons therefor private respondent’s failure to substantiate its claim that petitioner was leaving the country to abscond and to prove that there were no sufficient securities for the enforcement of its claims.
The possibility of an amicable settlement between petitioner and private respondent being remote, the case was heard in due course. On June 15, 1989, after the private respondent had presented its evidence, petitioner filed a demurrer to evidence contending that private respondent had failed to present "material and competent evidence sufficient to hold (petitioner) civilly liable" for the claims against him. Petitioner averred that private respondent’s evidence failed to prove that: (a) his credit application was duly approved; (b) granting that such application was approved by private respondent, the deliveries, per the invoices presented in evidence, were outside of the named areas of coverage appearing in the application, and (c) he never signed any purchase order in relation to the subject of the claim.
On June 26, 1989, the trial court rendered a decision holding that there was no evidence of petitioner’s participation in the transaction involved, as he had not received the goods and the deliveries were made in places outside of La Union, Ilocos Sur, Ilocos Norte, Abra and Baguio City. It also found that petitioner’s conformity to Gay-ya’s promissory note and schedule of payments did not make him liable because it merely showed his "conformity to the assumption by defendant Higido Gay-ya, Jr. of such liability." It disposed of the case as follows:jgc:chanrobles.com.ph
"WHEREFORE, in view of the foregoing, the case as against Edmundo Quebral is hereby dismissed. On the other hand, judgment is hereby rendered in favor of plaintiff and against defendant Higidio Gay-ya, Jr. ordering him to pay plaintiff:chanrob1es virtual 1aw library
1. The sum of P102,991.54 plus interest at legal rate from October 8, 1984 until the full amount is paid;
2. To pay plaintiff the sum of P20,000.00 by way of attorney’s fees;
3. Declaring the writ of preliminary attachment against the property of defendant Higidio Gay-ya, Jr. permanent; and
4. Defendant to pay the costs of suit."cralaw virtua1aw library
Gist of Appellate Court’s Decision
Private respondent appealed to the Court of Appeals which, on July 29, 1991, rendered its decision finding that, contrary to petitioner’s allegation in his demurrer to evidence, it was not necessary for private respondent to prove the approval of petitioner’s credit application because the fact of such approval was alleged in paragraph 3 of the complaint, and petitioner had admitted in paragraph 2 of his answer said paragraph of the complaint. The appellate court ruled that by such judicial admission, petitioner could no longer dispute the fact of the approval of his credit application.
On petitioner’s denials that he was the business partner of Gay-ya and that he had not known nor consented to Gay-ya’s transactions with private respondent, the Court of Appeals said:jgc:chanrobles.com.ph
"Defendant Quebral, however, denied in his answer that the other defendant Higidio Gay-ya, Jr. was his business partner. This denial might be true, but in his credit application Exh.’B’ or ‘1’, he expressly named Gay-ya together with himself as the ‘PERSONS AUTHORIZED TO RECEIVE GOODS/DELIVERIES’ from plaintiff-appellant corporation; and in his letter to appellant’s official Efren Vargas Exh.’K’, defendant Quebral introduced Gay-ya to Vargas as my ‘representative’. Hence, although Gay-ya might not have been defendant Quebral’s partner, he (Quebral), however, expressly made known to appellant corporation that Gay-ya was his duly authorized representative in his business, and he could not, therefore, blame appellant for regarding Gay-ya as such.
"Defendant Quebral also denied in his answer knowledge of or consent to the transactions represented by the unpaid Sales Invoices Exhs.’C’ and ‘D’ dated October 8, and 22, 1984, respectively, claiming that it was only his defaulting co-defendant Higidio Gay-ya, Jr. who transacted said sales with plaintiff-appellant corporation. And Quebral later claimed in his demurrer, which the lower court sustained, that plaintiff-appellant’s evidence had failed to show that he knew of and was equally liable with Gay-ya for the value of the unpaid sales invoices. We are of the opinion, though, that contrary to defendant Quebral’s claim and the ruling of the lower court in his favor, plaintiff-appellant corporation had sufficiently established by its evidence defendant Quebral’s knowledge of and liability for the unpaid sales invoices in question, and as said defendant opted not to present evidence for himself and to rely solely on his demurrer to plaintiff-appellant’s evidence, then the latter’s evidence in this case stands uncontradicted and unrefuted and should, therefore, be taken as true."cralaw virtua1aw library
The Court of Appeals noted petitioner’s admission to the sheriff of his liability. As reflected in the sheriff’s return, upon receiving the order of attachment, petitioner "proposed an arrangement wherein he undertook to settle his obligation with the plaintiff corporation within reasonable time", for which reason the sheriff, in good faith, did not effect the attachment immediately. As regards Gay-ya’s promissory note bearing petitioner’s conformity and signature, the Court of Appeals held that" ‘conforme’ to Gay-ya’s personal assumption of responsibility for P91,904.73 out of the P102,991.54 which the latter even referred to in his covering letter as ‘the account of Mr. EDMUNDO V. QUEBRAL’, only binds Gay-ya and himself but does not necessarily bind appellant corporation who does not appear to have agreed to Gay-ya’s promissory not assuming personal liability for P91,904.73 out of Quebral’s account of P102,991.54 and his (Gay-ya’s) proposal to pay said amount on installment . . .." Therefore, the Court of Appeals concluded that petitioner is still liable to private respondent for the amount of P102,991.54 "inspite of Gay-ya’s promissory note, and especially as said promissory note also has remained unpaid." Furthermore, it was immaterial that the transactions involved were made in areas outside of the coverage of the credit application for, as testified to by the private respondent’s comptroller, petitioner could also sell in nearby provinces.
The Court of Appeals considered as the "most telling documentary evidence yet" against petitioner his own handwritten letter dated January 19, 1985 to Efren Vargas, an official of private respondent, which reads:jgc:chanrobles.com.ph
"January 19, 1985
"MR. EFREN VARGAS
UNIOIL
Dear Mr. Vargas,
Bearer is Mr. H.B. Gay-ya, Jr., my representative. He is accompanying Mr. DICK COSUE, operator of SHELL SS in Carmen, Rosales, Pangasinan. He is the cousin of Mr. W.T. KHO. He is interested in buying 20 drums of PROCESS OIL 150. He is asking for 30 days term and will give you his personal check. His present terms with SHELL is M-30. If you can accommodate him, bill him directly at P3100.00/drum. You may send Mr. Gay-ya to the plant to insure correctness of invoicing.
We are consolidating collection of the rums delivered to Joseph Li & Ms. Susan Lo. Mr. Gay-ya will explain to you further.
By the way, 1 drum delivered to Ms. Lo is leaking. It was half the content already when I last visited in Dagupan.
We will remit our collection soon.
Thanks & Regards,
Ed"
On this piece of evidence, the Court of Appeals said:jgc:chanrobles.com.ph
"Defendant Quebral did not deny, as he could not have denied, his foregoing personal letter to appellant’s official Efren Vargas who approved his credit application with said corporation. All he stated in his demurrer to plaintiff-appellant’s evidence with respect to said letter is that it is ‘worthless and does not have probative value in relation to the purpose for which it is being offered considering that it was never duly established. The alleged addressee of the letter was never presented to properly identify the same. (p. 180, Rec.)’ We find this contention incorrect, however, since said letter which was addressed to appellant’s official Efren Vargas, was presented by appellant as its Exh.’K’ and direct and additional direct examination to have been received by their office from defendant Quebral by way of reply to their collection letter and telegram which they had sent to the latter (pp. 2-3 tsn Jan. 10, 1989; pp. 16-17, tsn Feb. 21, 1989). There was no needed for Efren Vargas then to identify said letter himself since it was written to him by Quebral not in his personal capacity but in his capacity as an officer of appellant corporation and in connection with its business dealings with Quebral, and especially as the very contents of said letter shows that it was personally delivered to Vargas by defendant Quebral’s representative, the other defendant Higidio Gay-ya. In fact, appellant corporation would not have been able to present said letter of Quebral as evidence in this case if it did not receive the same from the latter in the ordinary course of business. As defendant Quebral had failed to present any contrary evidence to show that his said letter Exh.’K’ ha not been actually received by or delivered to appellant corporation, therefore, we believe and so hold that appellant corporation had sufficiently proved its receipt of said letter from Quebral."cralaw virtua1aw library
Interpreting petitioner’s letter, the Court of Appeals drew the following conclusions: petitioner ha indeed ordered oil products which he sold to Joseph Li and Susan Lo, and he himself promised to collect from said customers and to remit the collections to private Respondent. Noting that in the letter, petitioner was introducing Gay-ya while invoices involved were dated before the letter was sent, the Court of Appeals held that it could not have been possible for Gay-ya to make to make the particular orders manifested by the invoices. Thus, were it not for Gay-ya’s promissory note, petitioner should be held liable for the total amount of P102,991.54 because he acted upon the authority given him by the petitioner. Accordingly, the Court of Appeals disposed of the appeal as follows:jgc:chanrobles.com.ph
"WHEREFORE, the judgment appealed from herein is REVERSE and SET ASIDE, and the another judgment is entered herein:chanrob1es virtual 1aw library
On appellant’s complaint:chanrob1es virtual 1aw library
(1) Holding both defendants Edmundo Quebral and the defaulting defendant Higidio Gay-ya, Jr. liable to appellant corporation for the amount of P91,904.73, plus legal interests thereon until said amount is fully paid, with the right on the part of appellant corporation to collect said amount from either defendant Quebral or Gay-ya;
(2) Ordering defendant Edmundo Quebral to pay appellant corporation the amount of P11,086.81, which is the difference between the amount of P91,904.73 covered by defendant Gay-ya’s promissory note of Exh.’J-2’ and the amount of P102,991.54, which is the aggregate value of the Sales Invoices Exhs.’C’ and ‘D’;
(3) Ordering defendant Quebral to pay appellant corporation 25% attorney’s fees on the amount of P102,991.54, as stipulated in the Sales Invoices Exhs.’C’ and ‘D’; and
(4) Ordering both defendants Quebral and Gay-ya to pay the cost of this suit.
On defendant Quebral’s cross-claim:chanrob1es virtual 1aw library
(1) Ordering defendant Gay-ya to pay his co-defendant Quebral whatever principal amount the latter would be compelled to pay appellant corporation, up to the amount of P91,904.73, plus legal interests thereon until said amount is fully paid; and
(2) Ordering defendant Gay-ya to pay one-half of the attorney’s fees and cost that defendant Quebral would likewise be compelled to pay appellant corporation in this case."cralaw virtua1aw library
Alleged Errors of Court of Appeals raised by Petitioner
Petitioner filed a motion for reconsideration of the Court of Appeals’ decision but it was denied. Hence, the instant petition charging the Court of Appeals with "patent and manifest" error in: (a) admitting and considering Exhibit K as the basis for the finding that Gay-ya was petitioner’s representative; (b) finding that petitioner had sufficient knowledge of and liability for the unpaid sales invoices, and (c) relying upon and giving weight to the report/explanation of the deputy sheriff.
The foregoing alleged errors are attacks on factual findings of the appellate court, which normally are not reviewable by this Court in petitions under Rule 45. However, since the factual findings of the respondent Court are at variance with those of the trial court, we decided to go over the records of the case both in the Court of Appeals and in the Regional Trial Court.
Petitioner asserts that he "vigorously objected" to the admission of Exhibit K primarily because its original was not "produced and introduced as a witness to testify and be cross-examined on said exhibit.
Endnotes:
1. Fourth Division, composed of J. Alicia V. Sempio Diy, ponente, JJ., Vicente V. Mendoza, chairman and Oscar M. Herrera, member; Rollo, pp. 15-28.
2. Prescribed over by Judge Teresita Dizon-Capulong.
3. 186 SCRA 385 (June 6, 1990).
4. Cf. Reply to the comment on the petition, p. 4; Rollo, pp. 72-77, at p. 75.
5. Nepomuceno v. Commission on Elections, 126 SCRA 472, 478 (December 29, 1983).
6. Bagnas v. Court of Appeals, 176 SCRA 159 (August 10, 1989).
7. Cruz v. People, 144 SCRA 677, 680 (October 9, 1986).
8. Calde v. Court of Appeals, 233 SCRA 376 (June 27, 1994).