Culaba v. CA: 125862 : April 15, 2004 : J. Callejo Sr : Second Division
[G.R. NO. 125862.
FRANCISCO CULABA and DEMETRIA CULABA, doing business under
the name and style Culaba Store, Petitioners, v. COURT OF APPEALS and SAN MIGUEL CORPORATION, Respondents.
D E C I S I O N
CALLEJO, SR., J.:
This is a Petition for Review under Rule 45 of the Revised Rules
of Civil Procedure of the Decision1 of the Court of Appeals in CA-G. R. CV No. 19836 affirming in toto the Decision2 of the Regional Trial Court of Makati, Branch 138, in Civil Case No. 1033 for
collection of sum of money, and the Resolution3 denying the motion for reconsideration of the said decision.
The Undisputed Facts
The spouses Francisco and Demetria Culaba were the owners and
proprietors of the Culaba Store and were engaged in the sale and distribution
of San Miguel Corporations (SMC) beer products. SMC sold beer products on credit to the Culaba spouses in the
amount of P28,650. 00, as evidenced by Temporary Credit Invoice No. 42943.4 Thereafter, the Culaba spouses made a partial payment of P3,740. 00, leaving an
unpaid balance of P24,910. 00.
failed to pay despite repeated demands, SMC filed an action for collection of a
sum of money against them before the RTC of Makati, Branch 138.
The defendant-spouses denied any liability, claiming that they
had already paid the plaintiff in full on four separate occasions. To
substantiate this claim, the defendants presented four (4) Temporary Charge
Sales (TCS) Liquidation Receipts, as follows:chanroblesvirtua1awlibrary
April 19, 1983Receipt No. 27331for P8,0005 cralawred
April 22, 1983Receipt No. 27318for
April 27, 1983Receipt No. 27339for
April 30, 1983Receipt No. 27346for
Defendant Francisco Culaba testified that he made the foregoing
payments to an SMC supervisor who came in an SMC van. He was then showed a list
of customers accountabilities which included his account. The defendant, in
good faith, then paid to the said supervisor, and he was, in turn, issued
genuine SMC liquidation receipts.
For its part, SMC submitted a publishers affidavit9 to prove that the entire booklet of TCSL Receipts bearing Nos. 27301-27350 were
reported lost by it, and that it caused the publication of the notice of loss
in the July 9, 1983 issue of the Daily Express, as follows:chanroblesvirtua1awlibrary
NOTICE OF LOSS
CUSTOMERS ARE HEREBY INFORMED THAT TEMPORARY CHARGE SALES LIQUIDATION RECEIPTS
WITH SERIAL NOS. 27301-27350 HAVE BEEN LOST.
ANY TRANSACTION, THEREFORE,
ENTERED INTO WITH THE USE OF THE ABOVE RECEIPTS WILL NOT BE HONORED.
SAN MIGUEL CORPORATIONBEER DIVISIONMakati Beer
The Trial Courts Ruling
After trial on the merits, the trial court rendered judgment in
favor of SMC, and held the Culaba spouses liable on the balance of its
Wherefore, judgment is hereby rendered in favor of the plaintiff,
1. Ordering defendants
to pay the amount of
P24,910. 00 plus legal interest of 6% per annum from
April 12, 1983 until the whole amount is fully paid;chanroblesvirtuallawlibrary
2. Ordering defendants
to pay 20% of the amount due to plaintiff as and for attorneys fees plus
SO ORDERED.11 cralawred
According to the trial court, it was unusual that defendant
Francisco Culaba forgot the name of the collector to whom he made the payments
and that he did not require the said collector to print his name on the
receipts. The court also noted that although they were part of a single
booklet, the TCS Liquidation Receipts submitted by the defendants did not
appear to have been issued in their natural sequence. Furthermore, they were
part of the lost booklet receipts, which the public was duly warned of through
the Notice of Loss the plaintiff caused to be published in a daily newspaper.
This confirmed the plaintiffs claim that the receipts presented by the
defendants were spurious ones.
The Case on Appeal
On appeal, the appellants interposed the following assignment of
THE TRIAL COURT ERRED IN FINDING THAT THE
RECEIPTS PRESENTED BY DEFENDANTS EVIDENCING HIS PAYMENTS TO PLAINTIFF SAN
MIGUEL CORPORATION, ARE SPURIOUS.
THE TRIAL COURT ERRED IN CONCLUDING THAT
PLAINTIFF-APPELLEE HAS SUFFICIENTLY PROVED ITS CAUSE OF ACTION AGAINST THE
THE TRIAL COURT ERRED IN ORDERING
DEFENDANTS TO PAY 20% OF THE AMOUNT DUE TO PLAINTIFF AS ATTORNEYS FEES.12 cralawred
The appellants asserted that while the trial courts observations
were true, it was the usual business practice in previous transactions between
them and SMC.
The SMC previously
honored receipts not bearing the salesmans name. According to appellant
Francisco Culaba, he even lost some of the receipts, but did not encounter any
According to appellant Francisco, he could not be faulted for
paying the SMC collector who came in a van and was in uniform, and that any
regular customer would, without any apprehension, transact with such an SMC
Furthermore, the respective
receipts issued to him at the time he paid on the four occasions mentioned had
not yet then been declared lost. Thus, the subsequent publication in a daily
newspaper declaring the booklets lost did not affect the validity and legality
of the payments made.
its actuations, the SMC was estopped from questioning the legality of the
payments and had no cause of action against the Appellants.
Anent the issue of attorneys fees, the order of the trial court
for payment thereof is without basis. According to the appellant, the provision
for attorneys fees is a contingent fee, already provided for in the SMCs
contract with the law firm. To further order them to pay 20% of the amount due
as attorneys fees is double payment, tantamount to undue enrichment and
therefore improper.13 cralawred
The Appellee, for its part, contended that the primary issue in
the case at bar revolved around the basic and fundamental principles of agency.14 It was incumbent upon the defendants-appellants to exercise ordinary prudence
and reasonable diligence to verify and identify the extent of the alleged
agents authority. It was their burden to establish the true identity of the
assumed agent, and this could not be established by mere representation, rumor
or general reputation. As they utterly failed in this regard, the appellants
must suffer the consequences.
The Court of Appeals affirmed the decision of the trial court,
In the face of the somewhat tenuous evidence presented by the
appellants, we cannot fault the lower court for giving more weight to
appellees testimonial and documentary evidence, all of which establish with
some degree of preponderance the existence of the account sued upon.
ALL CONSIDERED, we
cannot find any justification to reject the factual findings of the lower court
to which we must accord respect, for which reason, the judgment appealed from
is hereby AFFIRMEDin all respects.
SO ORDERED.15 cralawred
Hence, the instant petition.
The petitioners pose the following issues for the Courts
OR NOT THE RESPONDENT HAD PROVEN BY PREPONDERANT EVIDENCE THAT IT HAD PROPERLY
AND TIMELY NOTIFIED PETITIONER OF LOST BOOKLET OF RECEIPTS
OR NOT RESPONDENT HAD PROVEN BY PREPONDERANT EVIDENCE THAT PETITIONER WAS
REMISS IN THE PAYMENT OF HIS ACCOUNTS TO ITS AGENT.16 cralawred
According to the Petitioners, receiving receipts from the private
respondents agents instead of its salesmen was a usual occurrence, as they had
been operating the store since 1979. Thus, on four occasions in April 1983,
when an agent of the respondent came to the store wearing an SMC uniform and
driving an SMC van, petitioner Francisco Culaba, without question, paid his
accounts. He received the receipts without fear, as they were similar to what
he used to receive before. Furthermore, the petitioners assert that, common
experience will attest that unless the attention of the customers is called
for, they would not take note of the serial number of the receipts.
The petitioners contend that the private respondent advertised
its warning to the public only after the damage was done, or on July 9, 1993.
Its belated notice showed its glaring lack of interest or concern for its
customers welfare, and, in sum, its negligence.
Anent the second issue, petitioner Francisco Culaba avers that
the agent to whom the accounts were paid had all the physical and material
attributes or indications of a representative of the private respondent,
leaving no doubt that he was duly authorized by the latter.
Petitioner Francisco Culabas testimony that
he does not necessarily check the contents of the receipts issued to him
except for the amount indicated if [the] same accurately reflects his actual
payment is a common attitude of customers. He could, thus, not be faulted for
paying the private respondents agent on four occasions.
Petitioner Francisco Culaba asserts that he
made the payment in good faith, to an agent who issued SMC receipts which
appeared to be genuine. Thus, according to the Petitioners, they had duly paid
their obligation in accordance with Articles 1240 and 1242 of the New Civil
The private respondent, for its part, avers that the burden of
proving payment is with the debtor, in consonance with the express provision of
Article 1233 of the New Civil Code. The petitioners miserably failed to prove
the self-serving allegation that they already paid their liability to the
private respondent. Furthermore, under normal circumstances, an obligor would
not just pay a substantial amount to someone whom he saw for the first time,
without even asking for the latters name.
The Ruling of the Court
The petition is dismissed.
The petitioners question the findings of the Court of Appeals as
to whether the payment of the petitioners obligation to the private respondent
was properly made, thus, extinguishing the same. This is clearly a factual
issue, and beyond the purview of the Court to delve into. This is in consonance
with the well-settled rule that findings of fact of the trial court, especially
when affirmed by the Court of Appeals, are accorded the highest degree of
respect, and generally will not be disturbed on appeal. Such findings are
binding and conclusive on the Court.17 Furthermore, it is not the Courts function under Rule 45 of the Rules of
Court, as amended, to review, examine and evaluate or weigh the probative value
of the evidence presented.18 cralawred
To reiterate, the issue being raised by the petitioners does not
involve a question of law, but a question
of fact, not cognizable by this Court in a Petition for Review under Rule
45. The jurisdiction of the Court in such a case is limited to reviewing only
errors of law, unless the factual findings being assailed are not supported by
evidence on record or the impugned judgment is based on a misapprehension of
A careful study of the records of the case reveal that the
appellate court affirmed the trial courts factual findings as follows:chanroblesvirtua1awlibrary
27331, 27318, 27339 and 27346 were included in the private respondents lost
booklet, which loss was duly advertised in a newspaper of general circulation;
thus, the private respondent could not have officially issued them to the
petitioners to cover the alleged payments on the dates appearing thereon.
something amiss in the way the receipts were issued to the Petitioners, as one
receipt bearing a higher serial number was issued ahead of another receipt
bearing a lower serial number, supposedly covering a later payment. The
petitioners failed to explain the apparent mix-up in these receipts, and no
attempt was made in this regard.
The fact that the
salesmans name was invariably left blank in the four receipts and that the
petitioners could not even remember the name of the supposed impostor who
received the said payments strongly argue against the veracity of the
We find no cogent reason to reverse the said findings.
The dismissal of the petition is inevitable even upon close
perusal of the merits of the case.
Payment is a mode of extinguishing an obligation.20 Article 1240 of the Civil Code provides that payment shall be made to the
person in whose favor the obligation has been constituted, or his
successor-in-interest, or any person authorized to receive it.21 In this case, the payments were purportedly made to a supervisor of the
private respondent, who was clad in an SMC uniform and drove an SMC van. He
appeared to be authorized to accept payments as he showed a list of customers
accountabilities and even issued SMC liquidation receipts which looked genuine.
Unfortunately for petitioner Francisco Culaba, he did not ascertain the
identity and authority of the said supervisor, nor did he ask to be shown any
identification to prove that the latter was, indeed, an SMC supervisor. The
petitioners relied solely on the mans representation that he was collecting
payments for SMC. Thus, the payments the petitioners claimed they made were not
the payments that discharged their obligation to the private respondent.
The basis of agency is representation.22 A person dealing with an agent is put upon inquiry and must discover upon his
peril the authority of the agent.23 In the instant case, the petitioners loss could have been avoided if they had
simply exercised due diligence in ascertaining the identity of the person to
whom they allegedly made the payments. The fact that they were parting with
valuable consideration should have made them more circumspect in handling their
business transactions. Persons dealing with an assumed agent are bound at their
peril to ascertain not only the fact of agency but also the nature and extent
of authority, and in case either is controverted, the burden of proof is upon
them to establish it.24 The petitioners in this case failed to discharge this burden, considering that
the private respondent vehemently denied that the payments were accepted by it
and were made to its authorized representative.
Negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the conduct of
human affairs, would do, or the doing of something, which a prudent and
reasonable man would not do.25 In the case at bar, the most prudent thing the petitioners should have done was
to ascertain the identity and authority of the person who collected their
payments. Failing this, the petitioners cannot claim that they acted in good
faith when they made such payments. Their claim therefor is negated by their
negligence, and they are bound by its consequences. Being negligent in this
regard, the petitioners cannot seek relief on the basis of a supposed agency.26 cralawred
WHEREFORE, the instant
petition is hereby DENIED. The assailed Decision dated April 16, 1996, and the
Resolution dated July 19, 1996 of the Court of Appeals are AFFIRMED. Costs
against the petitioners.
Puno, (Chairman), Quisumbing, Austria-Martinez, and TINGA, JJ., concur.
Penned by Associate Justice Godardo A. Jacinto, with Associate Justices Salome
A. Montoya and Romeo A. Brawner concurring.
Penned by Judge Fernando P. Agdamag.
Exhibit A, Records, Vol. I, p. 61.
Records, Vol. II, p. 596.
Brief for the Defendants-Appellants, CA Rollo
Brief for Plaintiff-Appellee, Id.
Article 1231(1) of the Civil Code provides that obligations are extinguished by
payment or performance.
26 Dizon v. Court of Appeals, supra.
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