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NestlPhilippines,Inc.vs.FYSons,Incorporated
*
G.R.No.150780.May5,2006.
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*SECONDDIVISION.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
Bustos,Villafuerte&Associatesforpetitioner.
MichaelElbiniasforrespondent.
CORONA,J.:
ThisisapetitionforreviewoncertiorariunderRule45oftheRules
1
ofCourtassailingthedecision oftheCourtofAppeals(CA)inCA
G.R.CVNo.57299datedJanuary11,2001whichinturnaffirmed
with modification the decision of Branch 57 of the Regional
2
Trial
Court(RTC)ofMakatiCityinCivilCaseNo.903169,
3
aswellas
theCAsresolution dated
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626
626 SUPREMECOURTREPORTSANNOTATED
NestlPhilippines,Inc.vs.FYSons,Incorporated
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GuevaraSalongaoftheFormer11thDivisionoftheCourtofAppealsRollo,p.48.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
agreementandthevariousactsofbadfaithcommittedbypetitioner
againstrespondent.Respondentdemandedthepaymentofdamages.
Inturn,onNovember5,1990,petitionersentrespondentademand
letter and notice of termination, alleging that the latter had
outstanding accounts of P995,319.81. When the alleged accounts
were not settled, petitioner applied the P500,000 time deposit as
partialpayment.
Respondent filed
4
a complaint for damages against petitioner,
allegingbadfaith. Accordingtorespondent:
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4CivilCaseNo.903169.
5Rollo,pp.2829.
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628 SUPREMECOURTREPORTSANNOTATED
NestlPhilippines,Inc.vs.FYSons,Incorporated
RespondentsoughtactualdamagesofP1,000,000,moraldamagesof
P200,000, exemplary damages of P100,000, attorneys fees of
P100,000,plusthereturnoftheP500,000timedepositandcostsof
suit. In its answer, petitioner interposed a counterclaim for
P495,319.81 representing the balance of respondents overdue
accounts, with interest of 2% per month from the date of default
untilfullypaid,moraldamagesofP100,000,exemplarydamagesof
P200,000,attorneysfeesofP120,000andcostsofsuit.
In a decision dated November 10, 1997, the Makati City RTC
ruledinfavoroftherespondent:
WHEREFORE,premisesconsidered,judgmentisherebyrenderedinfavor
of the plaintiff and against the defendant ordering the defendant to pay
plaintiffthefollowing:
Theplaintiffhowever,isherebyorderedtopaythedefendanttheamount
of P53,214,26 (sic) which amount has been established as the amount the
defendantisentitledfromtheplaintiff.
Threefourthscostsagainstthedefendant.
6
SOORDERED.
PetitionerappealedthedecisiontotheCA.OnJanuary11,2001,the
CA rendered a decision affirming the RTCs decision with
modification:
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6Rollo,pp.2728.
7ConsistingoftheP1,000,000awardedbytheRTCplustheP500,000timedeposit.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
amountofP53,214.26payablebytheappelleetotheappellantisDELETED.
8
SOORDERED.
Both the CA and the RTC found, among others, that petitioner
indeed failed to provide support to respondent, its distributor that
petitionerunjustifiablyrefusedtodeliverstockstorespondentthat
theimpositionoftheP20,000finewasvoidforhavingnobasisthat
petitioner failed to prove respondents alleged outstanding
obligation that petitioner terminated the agreement without
sufficientbasisinlaworequityandinbadfaithandthatpetitioner
shouldbeheldliablefordamages.
Hencethispetitionraisingthefollowinggrounds:
(1)
(2)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN
DISREGARDING THE TESTIMONY OF THE WITNESS FOR THE
PETITIONER, CRISTINA RAYOS WHO PREPARED THE
STATEMENTOFACCOUNT(EXHIBIT11)ONTHEGROUNDSTHAT
SHEWASNOTINVOLVEDINTHEDELIVERYASSHE
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8Id.,p.46.
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630 SUPREMECOURTREPORTSANNOTATED
NestlPhilippines,Inc.vs.FYSons,Incorporated
(3)
(4)
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9Rollo,pp.1113.
10Id.,p.14.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
Respondentcountersthatthisstatementwasmerelyinanswertothe
question of the presiding judge on what ground petitioner
supposedly terminated the agreement. The witness was not being
asked,norwasheaddressing,thetruthofsuchground.Infact,this
witness later testified that (petitioner) wrote us back saying that
they(had)terminatedmycontractandthatIowe(d)themsomething
11
likeP900,000.
Petitioners argument is palpably without merit and deserves
scantconsideration.ItquotedMr.Yuesstatementinisolationfrom
therestofhistestimonyandtookitoutofcontext.Obviously,Yues
statementcannotbeconsideredajudicialadmissionthatrespondent
had an unpaid obligation of P900,000 and that the agreement had
beenterminatedforthisreason.
On the second issue, petitioner argues that the CA should not
have disregarded the testimony of petitioners witness, Cristina
Rayos, who prepared the statement of account on the basis of the
invoices and delivery orders
12
corresponding to the alleged overdue
accountsofrespondent. TheCAruledthatpetitionerwasnotable
toprovethatrespondentindeedhadunpaidaccounts,saying,among
others, that the testimony of Rayos constituted incompetent
evidence:
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11Id.,pp.7980.
12Rollo,p.15.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
However, she did not identify the signatures appearing on the Delivery
Orders marked as Exhibits 13A, 14A, 15A and 16A as the
personswhoreceivedthegoodsfortheappellant.Inanycase,shecouldnot
haveidentifiedthesame,forshewasnotinvolvedinthedelivery,assheis
only in charge of the records and documents on all13accounts receivables as
partofherdutiesasCreditandCollectionManager.
PetitionercontendsthatthetestimonyofRayoswasanexceptionto
14
thehearsayruleunderSection43,Rule130oftheRulesofCourt:
Entriesinthecourseofbusiness.Entriesmadeat,ornearthetimeofthe
transactions to which they refer, by a person deceased, or unable to testify,
who was in a position to know the facts therein stated, may be received as
prima facie evidence, if such person made the entries in his professional
capacityorintheperformanceofdutyandintheordinaryorregularcourse
ofbusinessorduty.
Petitionerscontentionhasnomerit.
The provision does not apply to this case because it does not
involveentriesmadeinthecourseofbusiness.Rayostestifiedona
statement of account she prepared on the basis of invoices and
deliveryorderswhichshe,however,knewnothingabout.Shehadno
personalknowledge of the facts on which the accounts were based
since,admittedly,shewasnotinvolvedinthedeliveryofgoodsand
wasmerelyinchargeoftherecordsanddocumentsofallaccounts 15
receivable as part of her duties as credit and collection manager.
Shethusknewnothingofthetruthorfalsityofthefactsstatedinthe
invoices and delivery orders, i.e., whether such deliveries were in
fact made in the amounts and on the dates stated, or whether they
were actually received by respondent. She was not even the credit
andcollectionmanagerduringtheperiod
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13Rollo,p.39.
14Id.,p.16.
15Thatis,atthetimeshetestifiedRollo,p.16.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
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the agreement was in effect. This can only mean that she merely
obtained these documents from another without any personal
knowledgeoftheircontents.
The foregoing shows that Rayos was incompetent to testify on
whether or not the invoices and delivery orders turned over to her
correctlyreflectedthe details of the deliveries made. Thus, the CA
correctlydisregardedhertestimony.
Furthermore, the invoices and delivery orders presented by
petitioner were selfserving. Having generated these documents,
petitioner could have easily fabricated them. Petitioners failure to
present any competent witness to identify the signatures and other
informationinthoseinvoicesanddeliveryorderscastdoubtontheir
veracity.
Petitioner next argues that respondent did not deny during the
trial that it received the goods covered by17 the invoices and was
thereforedeemedtohaveadmittedthesame. Thisargumentcannot
be taken seriously. From the very beginning, respondents position
was that petitioner concocted falsified charges 18
of nonpayment to
justify the termination of their agreement. In no way could
respondentbedeemedtohaveadmittedthosedeliveries.
On the third issue, petitioner questions the award of actual
damages in the amount of P1,000,000 and the refund of the
P500,000 time deposit, contending that it validly terminated the
agreement because of respondents failure to pay its overdue
accounts.
Asdiscussedabove,theCAdeclaredthatpetitionerwasnotable
to prove that respondent had unpaid accounts, thus debunking the
claim of a valid termination. The CA also held petitioner guilty of19
various acts which violated the provisions of the agreement.
Consequently,forpetitionersbreachof
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16Id.,p.78.
17Rollo,p.16.
18Rollo,p.28.
19Id.,pp.1118.
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634 SUPREMECOURTREPORTSANNOTATED
NestlPhilippines,Inc.vs.FYSons,Incorporated
theagreement,theCAawardedactualdamagestorespondentinthe
amountofP1,000,000.Petitioner,otherthanclaimingthatitvalidly
terminatedtheagreement,didnotchallengethefindingsoftheCA
thatitcommittedvariousviolationsoftheagreement.Hence,there
waslegalbasisforthegrantofactualdamages.
Petitioner asserts that the documentary evidence presented by
respondenttoproveactualdamagesintheamountofP4,246,015.60
should not have been considered because respondents complaint
onlyprayedforanawardofP1,000,000.Itfurthercontendsthatthe
courtacquiresjurisdictionovertheclaimonlyuponpaymentofthe
20
prescribeddocketfee.
Indeed, a court acquires jurisdiction over
21
the claim of damages
upon payment of the correct docket fees. In this case, it is not
disputed that respondent paid docket fees based on the amounts
prayedforinitscomplaint.Respondentadducedevidencetoprove
its losses. It was proper for the CA and the RTC to consider this
evidence and award the sum of P1,000,000. Had the courts below
awardedasummorethanP1,000,000,whichwastheamountprayed
for,anadditionalfilingfeewouldhavebeenassessedandimposed
22
asalienonthejudgment. However,thecourtslimitedtheiraward
totheamountprayedfor.
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20Rollo,pp.1617.
1151321SCRA524,533536(1999),citingAyalaCorporationv.Madayag,G.R.No.
88421, 30 January 1990, 181 SCRA 687 Ng Soon v. Alday, G.R. No. 85879, 29
September1989,178SCRA221.
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NestlPhilippines,Inc.vs.FYSons,Incorporated
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23China Airlines v. Chiok,G.R. No. 152122, 30 July 2003, 407 SCRA 432, 445,
citingGuerrerov.CourtofAppeals,349Phil.605285SCRA670(1998)Batingalv.
CourtofAppeals,1February2001,351SCRA60.
24BankofthePhilippineIslandsv.Leobrera,G.R.No.137147,18November2003,
416SCRA15,2122,citingMercadov.People,G.R.No.149375,26November2002,
392SCRA687.
25Tocaov.CourtofAppeals,G.R.No.127405,4October2000,342SCRA20,38,
citingAirFrancev.Carrascoso,124Phil.772,74218SCRA155,171(1966).
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NestlPhilippines,Inc.vs.FYSons,Incorporated
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