January 2009 - Philippine Supreme Court Decisions/Resolutions
G.R. No. 146428 - HEIRS OF THE DECEASED CARMEN CRUZ-ZAMORA v. MULTIWOOD INTERNATIONAL, INC.
[G.R. NO. 146428 : January 19, 2009]
HEIRS OF THE DECEASED CARMEN CRUZ-ZAMORA, Petitioners, v. MULTIWOOD INTERNATIONAL, INC., Respondent.
D E C I S I O N
LEONARDO-DE CASTRO, J.:
Before us is a Petition for Review on Certiorari of the Court of Appeals' (CA) Decision1 dated October 19, 2000 and Resolution2 dated December 18, 2000 in CA-G.R. CV No. 53451 which reversed and set aside the decision of the Regional Trial Court (RTC), National Capital Judicial Region, Makati City, Branch 59, and denied petitioners' motion for reconsideration respectively.
The facts as culled from the records are as follows:
On November 18, 1993, the late Carmen Cruz-Zamora (Zamora) filed a Complaint against respondent Multiwood International, Inc. (Multiwood). The complaint alleged that sometime in 1987, Zamora signed a Marketing Agreement to act as an agent of Multiwood. As agent, Zamora claimed that she obtained certain contracts on behalf of Multiwood and in renumeration for her services, she was to be paid ten percent (10%) commission for the said projects. Zamora claimed that Multiwood defaulted in the payment of her commission for the contracts with Edsa Shangrila, Makati Shangrila and Diamond Hotel. She was compelled to file an action for the collection of her commission in the amount of Two Hundred Fifty Four Thousand Eighty-Nine Pesos and Fifty Two Centavos (
P254,089.52) when her repeated demands for payment remained unheeded.
In its Answer with Counterclaim, Multiwood asserted that Zamora was not entitled to receive commissions for the Edsa Shangrila, Makati Shangrila and Diamond Hotel projects on the ground that those projects were "construction contracts" while their Marketing Agreement spoke only of the sale of Multiwood products. By way of counterclaim, Multiwood claimed, among others, that Zamora had unliquidated advances in the amount of Thirty Seven Thousand Three Hundred Ninety-Seven Pesos and Seventy One Centavos (
During pre-trial, the parties entered into a stipulation of facts and limited the issues to the following:
1. Whether or not the projects indicated in the agreement are contracts for services (or construction contracts) and not contracts for the sale of products;
2. Whether or not the defendant is liable to pay the amount of
P254,089.52 and damages;
3. Whether or not the plaintiff may be held liable on the defendant's counterclaim.4
On April 15, 1996, the RTC rendered a decision in favor of Zamora. The trial court interpreted the Marketing Agreement as to include construction contracts and allowed Zamora to claim the ten percent (10%) commission granted in the said agreement. In arriving at the decision, the trial court took into consideration the alleged intention of the contracting parties purportedly evidenced by Multiwood's contemporaneous and subsequent acts of making "partial payments" of the commission on the disputed projects as evidenced by various vouchers (Exhibits K-2 to K-7) which, however, were not offered in evidence by either party and marked for exhibit only during the testimony of defense witness, Adrian Guerrero.5 The dispositive portion of the said decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant, as follows:
1. Ordering the defendant (respondent) to pay the plaintiff (petitioner) the following amounts:
P165,941.78 plus legal interest thereon at the rate of twelve percent (12%) per annum starting November 18, 1993, the date when the complaint was filed until the amount is fully paid;
P40,000.00 representing moral damages;
P40,000.00 as and for reasonable attorney's fees.
2. Ordering the dismissal of defendant's (respondent's) counterclaim, for lack of merit; andcralawlibrary
3. With costs against the defendant (respondent).
Multiwood appealed to the CA insisting that based on the Marketing Agreement, Zamora's commissions were due only on contracts for the sale of its products, and not for construction contracts. Multiwood argued that the trial court erred in its interpretation of the Marketing Agreement and ultimately revised and amended its terms despite the absence of any ambiguity as to the intent of the parties.
On October 19, 2000, the CA rendered its decision reversing and setting aside the decision of the RTC. The CA ruled that Zamora could not validly claim commissions from the Edsa Shangrila, Makati Shangrila and Diamond Hotel contracts on the basis of the Marketing Agreement because these contracts were limited only to the solicitation of the products of prospective foreign or local buyers of Multiwood, excluding other services offered by the latter such as construction services. Thus, the CA decided in this wise:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City, Branch 59 in Civil Case No. 93-4292 is hereby REVERSED AND SET ASIDE and a new one entered DISMISSING the Complaint for lack of merit.
The plaintiff-appellee (petitioner) is also declared LIABLE to pay the unliquidated advances she obtained from the defendant-appellant (respondent) in the amount of Thirty Seven Thousand Three Hundred Ninety Seven Pesos and Seventy One Centavos (
P37,397.71) with legal interest at six percent (6%) per annum computed from August 4, 1994 until fully paid.
No pronouncement as to costs.
Zamora's subsequent motion for reconsideration having been likewise denied by the CA in the Resolution dated December 18, 2000, she elevated the case to this Court through the instant Petition for Review which raises the following arguments:
(1) The Hon. Court of Appeals erred in adjudging that private respondent is not liable to compensate petitioner for her services in soliciting construction contracts on the ground that petitioner's counsel failed to offer in evidence Exhs. K to K-7.
(2) The Hon. Court of Appeals erred in not holding that under Exhs. B to H, with sub-markings in relation to Exh. A, private respondent acknowledged or admitted its liability for a rate of 10% commission to petitioner for the latter's solicitation of construction contracts.
(3) The Hon. Court of Appeals erred in not holding that, even if the solicitation of construction contracts was not covered by the Marketing Agreement (Exh. A), a new separate contract was deemed perfected between the parties as evidenced by Exhs. B to H, with submarkings.
(4) The Hon. Court of Appeals erred in not holding that private respondent would be unjustly enriched at the expense of petitioner if the latter is not compensated for her valuable services.
(5) The Hon. Court of Appeals erred in not affirming in toto the trial court's Decision.
On October 3, 2002, Zamora's counsel filed a Motion to Substitute Deceased Petitioner8 informing the Court that Zamora had passed away on September 30, 2002 and asking that her heirs be substituted as petitioners pursuant to Section 16, Rule 3 of the Rules of Court. Accordingly, in the Resolution9 dated January 22, 2003, the Court granted the motion.
Petitioners maintain that the interior construction projects solicited by Zamora, i.e., the renovation/improvement of the coffee shop, health clubs, Chinese restaurant and barbeque pavilions of the Edsa Shangrila; the renovation of the ballroom, meeting room, lobby and elevator interior of the Makati Shangrila; and, the renovation of Presidential Suite of the Diamond Hotel, fell within the scope of the Marketing Agreement. The identification, "solicitation, finding or introduction for negotiation of buyers, dealers and customers" for Multiwood's product as stated in the agreement is an encompassing term as to include the solicitation of interior construction projects. Besides the construction projects it afforded Multiwood the opportunity to sell and supply its products to the project owner to implement the overall interior design. Petitioners advert to their interpretation of the text of the Marketing Agreement, as well as Multwood's subsequent alleged acquiescence in Zamora's solicitation of the disputed construction contracts and supposed partial payment of her commission therefor as indicia of the parties' intention to include the said solicitation of construction contracts within the coverage of the Marketing Agreement. These operative acts purportedly lead to the perfection of a new contract between the parties, albeit not reduced in writing. Hence, Multiwood is estopped from denying its obligation as the same would unjustly enrich the latter at Zamora's expense.
We deny the petition.
At the outset, the Court notes that Zamora's cause of action is anchored solely on the parties' Marketing Agreement, the due execution and authenticity of which are undisputed.
When the terms of the agreement are clear and explicit, such that they do not justify an attempt to read into them any alleged intention of the parties, the terms are to be understood literally just as they appear on the face of the contract. It is only in instances when the language of a contract is ambiguous or obscure that courts ought to apply certain established rules of construction in order to ascertain the supposed intent of the parties. However, these rules will not be used to make a new contract for the parties or to rewrite the old one, even if the contract is inequitable or harsh. They are applied by the court merely to resolve doubts and ambiguities within the framework of the agreement.10
Bearing in mind the aforementioned guidelines, we find that the CA committed no reversible error when it ruled that the construction projects solicited by Zamora for Multiwood were outside the coverage of the Marketing Agreement so as preclude the former from claiming a ten percent (10%) commission. The plain import of the text of the Marketing Agreement leaves no doubt as to the true intention of the parties in executing the Marketing Agreement. The pertinent provisions of the said Marketing Agreement11 are as follows:
WHEREAS, the principal is engaged in the manufacture and export of furniture and such other related products using various types of suitable raw materials;
WHEREAS, the principal needs the services of the agent in soliciting and finding buyers, customers, or dealers, whether individuals or entities, for the products of the principal and agent has represented that she has the capability and competence to provide the said services;
NOW, THEREFORE, for and in consideration of the foregoing and of the covenants hereinafter specified, the parties hereto have agreed as follows:
1. That principal hereby grants the agent the non-exclusive right to identify, solicit, find or introduce for negotiation, prospective local and foreign buyers, dealers, or customers for the products of the principal.
x x x
4. That for the services of the agent under this agreement, the principal agrees to pay her Ten Percent (10%) of the face value of the invoice price, covering the letter of credit, or such similar instrument representing the actual purchase price for the products sold or shipped by the principal. x x x. (emphasis ours)
Both the trial court and the CA found that the Marketing Agreement quoted above does not mention construction contracts among the contemplated services of Zamora that would be compensable with a ten percent (10%) commission. The lower courts, however, differed with respect to the evidentiary weight that should be accorded to Exhibits K to K-7 which were never formally offered in evidence by any party.
After a consideration of the evidence, we agree with the CA that the trial court committed an error in interpreting the Marketing Agreement to include construction contracts based solely on Exhibits K-2 to K-7 which were allegedly contemporaneous acts of Multiwood of paying in part Zamora's commissions on construction contracts. As borne by the records, these exhibits were only marked as such during the testimony of the defense witness, Adrian Guerrero, but not offered in evidence by either party.
Section 34, Rule 132 of the Rules of Court states:
SEC. 34. Offer of evidence. - The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified.
The trial court's reliance on Exhibits "K-2" to "K-7" is thus, misplaced. It has no evidentiary value in this case because it was not offered in evidence before the trial court. The rule is that the court shall not consider any evidence which has not been formally offered. The purpose for which the evidence is offered must be specified. The offer of evidence is necessary because it is the duty of the court to rest its findings of fact and its judgment only and strictly upon the evidence offered by the parties. Unless and until admitted by the court in evidence for the purpose or purposes for which such document is offered, the same is merely a scrap of paper barren of probative weight. Mere identification of documents and the markings thereof as exhibits do not confer any evidentiary weight on documents unless formally offered.12
Plainly, the trial court should not have read terms into the Marketing Agreement that were not expressly in the agreement itself. The agreement is clear, plain and simple that it leaves no room for interpretation. It explicitly provides that for the services of Zamora, as agent under the agreement, Multiwood agreed to pay her in the amount equivalent to ten percent (10%) of the face value of the invoice price, covering the letter of credit or such other instrument representing the actual purchase price for the products sold or shipped by Multiwood. In other words, Zamora's commission under the Marketing Agreement was to be paid only for products sold or supplied by Multiwood and not for services rendered by the latter. As admitted by Zamora herself during cross-examination, the Edsa Shangrila, Makati Shangrila and Diamond Hotel projects were "interior construction" projects13 and not simply contracts for sale or supply of Multiwood products.
As mandated by Article 1370 of the Civil Code, if the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.
Moreover, Section 9, Rule 130 of the Revised Rules of Court is also in point:
SEC. 9. Evidence of written agreements. - When the terms of an agreement have been reduced in writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.
However, a party may present evidence to modify, explain, or add to the terms of the written agreement if he puts in issue in his pleading:
(a) An intrinsic ambiguity, mistake, or imperfection in the written agreement;
(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.
The "parol evidence rule" forbids any addition to or contradiction of the terms of a written instrument by testimony or other evidence purporting to show that, at or before the execution of the parties' written agreement, other or different terms were agreed upon by the parties, varying the purport of the written contract. When an agreement has been reduced to writing, the parties cannot be permitted to adduce evidence to prove alleged practices which to all purposes would alter the terms of the written agreement. Whatever is not found in the writing is understood to have been waived and abandoned.14 None of the above-cited exceptions finds application to the instant case, more particularly, the alleged failure of the contract to express the true intent and agreement of the parties nor did Zamora raise any of the issues at the proceedings before the trial court.
With more reason, documentary evidence which was not formally offered cannot be used to modify, explain or add to the terms of an agreement.
In any event, even assuming purely for the sake of argument that Exhibits K-2 to K-7 are admissible evidence, they do not support Zamora's contention that she is entitled to a ten percent (10%) commission even on construction contracts she has solicited pursuant to the Marketing Agreement. A perusal of Exhibits K-2 to K-7 does not clearly show that these commissions were being paid for construction contracts or services. Moreover, most of the commissions purportedly paid to Zamora under Exhibits K-2 to K-7 were computed at a much lower rate of three percent (3%) and not the ten percent (10%) stipulated in the Marketing Agreement. We cannot simply accept, as the trial court did, Zamora's assertion that the lower rate of three percent (3%) commission was a partial payment of her commissions under the Marketing Agreement since there is nothing in Exhibits K-2 to K-7 to indicate that the commissions mentioned therein were only partial payments. The circumstances that Zamora did not include Exhibits K-2 to K-7 in her Complaint and that she did not demand payment of the alleged balance of the commissions therein from Multiwood further militate against her claim that these were partial payments of her commission under the Marketing Agreement subject of the present case.
An examination of even Exhibits B to H which were formally offered by Zamora do not substantiate her assertion that Multiwood agreed to pay her a ten percent (10%) commission on construction contracts whether under the Marketing Agreement or any other contract. We cannot subscribe to petitioners' view that mere silence or acquiescence of Multiwood to Zamora's solicitation of construction contracts is tantamount to agreement to payment of the ten percent (10%) commission under the Marketing Agreement. To be sure, Multiwood's defense is precisely that the issuance of the vouchers and checks (Exhibits B to H) attached to the complaint are not authorized under the Marketing Agreement and that there is no agreement authorizing Zamora to collect ten percent (10%) commissions on construction contracts. This Court notes that even Exhibits B to H show a discrepancy in the alleged agreed rate of commission since Exhibit H mentions a five percent (5%) commission and not a ten percent (10%) commission.
It is a basic rule in civil cases that the party having the burden of proof must establish his case by a preponderance of evidence, which simply means evidence which is of greater weight, or more convincing than that which is offered in opposition to it.15 However, although the evidence adduced by the plaintiff is stronger than that presented by the defendant, a judgment cannot be entered in favor of the former, if his evidence is not sufficient to sustain his cause of action. The plaintiff must rely on the strength of his own evidence and not upon the weakness of the defendant's.16 Whether or not Exhibits K to K-7 are considered or admitted in evidence, the Court finds that Zamora failed to prove by preponderant evidence her cause of action for collection of ten percent (10%) commission on her solicitations of interior construction contracts whether under the Marketing Agreement or any other agreement with the defendant.
All told, we find no reversible error committed by the CA in rendering the assailed Decision dated October 19, 2000 and Resolution dated December 18, 2000.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioners.
1 Penned by Associate Justice Martin S. Villarama, Jr., and concurred in by Associate Justices Romeo J. Callejo, Sr. (retired Supreme Court Associate Justice) and Juan Q. Enriques, Jr.; rollo, pp. 45-50.
2 Id. at 52.
3 Id. at 46.
4 CA rollo, pp. 33-36.
5 TNS, dated March 5, 1996, pp. 8-17.
6 Supra at note 4, p. 45.
7 Rollo, p. 49.
8 Id. at 87-88.
9 Id. at 125.
10 First Fil-Sin Lending Corporation v. Padillo, G.R. No. 160533, January 12, 2005, 448 SCRA 71, 76-77.
11 Annex "A" of petitioner's Complaint; RTC Record, p. 8.
12 Landingin v. Republic, G.R. No. 164948, June 27, 2006, 493 SCRA 415, 430.
13 TSN dated Nov. 21, 1995, pp. 14-16.
14 Roble v. Arbasa, G.R. No. 130707, July 31, 2001, 362 SCRA 69, 82-83.
15 Buduhan v. Pakurao, G.R. No. 168237, February 22, 2006, 483 SCRA 116, 122.
16 Ong v. Yap, G.R. No. 146797, February 18, 2005, 452 SCRA 41, 50.