THIRD DIVISION

G.R. No. 178169, January 12, 2015

NFF INDUSTRIAL CORPORATION, Petitioner, v. G & L ASSOCIATED BROKERAGE

AND/OR GERARDO TRINIDAD, Respondent.

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 chanRoblesvirtualLawlibrary

According to petitioner, on July 20, 1999, respondent company ordered one thousand
(1,000) pieces of bulk bags from petitioner, at Three Hundred Eighty Pesos (P380.00)
per piece, or a total purchase price of Three Hundred Eighty Thousand Pesos
(P380,000.00), 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 chanRoblesvirtualLawlibrary

Accordingly, petitioner made deliveries of the bulk bags to Hi-Cement on the following
dates and evidenced by the following documents, to wit:

Units Delivered Date of Delivery Amount Delivery Receipts Sales Invoices

No. 0226 dated No. 4113 dated
400 July 30, 1999 P152,000.00
July 30, 1999 July 30, 1999
No. 0229 dated No. 4120 dated
1,000 August 4, 1999 P380,000.00
August 4, 1999 August 4, 1999
600 August 6, 1999 P228,000.00 No. 0231 dated No. 4122 dated
 August 6, 1999 August 6, 19998
2,000 P760,000.00

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
as other 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 (P760,000.00). 12 All the sales invoices were duly served
upon, and received by respondent company’s representative, one Marian Gabay. 13 chanRoblesvirtualLawlibrary

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 (P380.00) per piece for a total purchase price of
Three Hundred Eighty Thousand Pesos (P380,000.00). 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, to a 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 chanRoblesvirtualLawlibrary

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.18chanRoblesvirtualLawlibrary

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 its claim 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 chanRoblesvirtualLawlibrary

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: ChanRoblesVirtualawlibrary

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: ChanRoblesVirtualawlibrary

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: ChanRoblesVirtualawlibrary

PREPONDERANCE OF EVIDENCE SHOWS THAT THE RESPONDENT COMPANY ACCEPTED

DELIVERY 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
chanRoblesvirtualLawlibrary

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 CA are contrary to those of the RTC, a minute
scrutiny by this Court is in order, and resort to duly proven evidence becomes
necessary.30 chanRoblesvirtualLawlibrary
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
chanRoblesvirtualLawlibrary

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: ChanRoblesVirtualawlibrary

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 chanRoblesvirtualLawlibrary

In Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.,40 the concept of

“delivery” was elucidated, to wit: ChanRoblesVirtualawlibrary

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
to and 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: ChanRoblesVirtualawlibrary

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 (P380.00/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?
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 to deliver 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 have to 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 well as
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 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, 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: ChanRoblesVirtualawlibrary

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 at the 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 August 6, 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 of non-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 to deliver 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: ChanRoblesVirtualawlibrary

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 to Union 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 chanRoblesvirtualLawlibrary

More importantly, in his testimony, respondent Trinidad categorically admitted receiving

the delivery receipts, which evince the actual delivery of the bulk bags, to wit: ChanRoblesVirtualawlibrary

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 chanRoblesvirtualLawlibrary

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 were duly
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 chanRoblesvirtualLawlibrary

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: ChanRoblesVirtualawlibrary

ARTICLE 1585. 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.
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 chanRoblesvirtualLawlibrary

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:
ChanRoblesVirtualawlibrary

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 evidently showing 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
chanRoblesvirtualLawlibrary

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 to effect delivery to the designated representative of respondent, the
latter would inevitably be unjustly enriched at the expense of the former. 61 chanRoblesvirtualLawlibrary

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 they have no
money to pay. Thus: ChanRoblesVirtualawlibrary

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 what was 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
side is, 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 liability of 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:
ChanRoblesVirtualawlibrary

The same principle was the subject and discussed in Rivera v. United Laboratories,
Inc.: ChanRoblesVirtualawlibrary

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. Accordingly, respondent is hereby ordered to pay petitioner the sum of
Seven Hundred Sixty Thousand Pesos (P760,000.00), 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,72as well as attorney’s fees.73chanRoblesvirtualLawlibrary

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, 201378up 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. cralawlawlibrary

Velasco, Jr., (Chairperson), Villarama, Jr., Reyes, and Jardeleza, JJ., concur.

Endnotes:

1
Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices Rosalinda
Asuncion-Vicente and Ramon M. Bato, Jr., concurring; Annex “A” to Petition, rollo, pp.
35-49.
2
Annex “B” to Petition, id. at 50.

Rollo, p. 13.
3

Id. at 12.
4

Id. at 13.
5

Id.
6

Id.
7

Id. at 14.
8

Id.
9

10
Id.
11
Id.
12
Id.
13
Id.
14
Comment to Petition, rollo, p. 88.
 Id. at 88-89.
15

Id. at 89.
16

Rollo, p. 15.
17

Id.
18

Id.
19

Id. at 14-15.
20

Id. at 15.
21

Id.
22

Id.
23

24
Annex “O” to Petition, rollo, pp. 80-81.

Supra note 1.
25

Id. at 48. (Emphasis in the original)

26

Rollo, p. 17.
27

Lagon v. Hooven Comalco Industries, Inc., 402 Phil. 404, 412-413 (2001).
28

Id. at 413.
29

Legaspi v. Court of Appeals, 161 Phil. 471, 478 (1976), citing Tolentino v. De Jesus,
30

155 Phil. 144 (1974).

Rollo, p. 21.
31

Supra note 1, at 93.

32

Cebu Winland Development Corporation v. Ong Siao Hua, 606 Phil. 103, 113 (2009).
33

34
Civil Code, Art. 1495.

Cebu Winland Development Corporation v. Ong Siao Hua, supra note 33, at 114.
35

Id.
36

Id.
37

Id.
38

Id.
39

40
421 Phil. 709 (2001).
 Id. at 731. (Emphasis ours)
41

42
TSN (Direct Examination of Richard Agustin Vergamos for the Plaintiff), March 10,
2003, pp. 27-42. (Emphasis supplied)

Supra note 24, at 78.

43

44
TSN (Direct Examination of Richard Agustin Vergamos for the Plaintiff), dated March
10, 2003, pp. 26-27. (Emphasis supplied)
45
Records, p. 63.

Id.
46

47
TSN (Direct Examination of Gerardo Trinidad for the Defense), October 13, 2003, pp.
26-28.
48
Records, p. 61.

Id.
49

Rollo, p. 24.
50

Id. at 22.
51

Id. at 25-26.
52

53
G.R. No. L-32217, August 15, 1988, 164 SCRA 312, citing Pan Pacific Company (Phils.)
v. Advertising Corporation, G.R. No. L-22050, June 13, 1968, 23 SCRA 977, 991.

Sy v. Mina, supra, at 315.

54

Id., citing Naga Development v. Court of Appeals, G.R. No. L-28173, September 30,
55

1971. 41 SCRA 106.

Supra note 24, at 78-79.

56

57
Records, p. 62.

Rollo, p. 26.
58

Id.
59

Id.
60

61
Records, p. 115.
62
TSN (Cross Examination of Aurelio L. Gomez), March 3, 2003, pp. 26-28. (Emphasis
supplied)

Republic v. Reyes-Bakunawa, G.R. No. 180418, August 28, 2013, 704 SCRA 163, 177-
63
178.

Id. at 178.
64

Id.
65

Id.
66

Supra note 24, at 80.

67

Id.
68

69
G.R. No. 182729, September 29, 2010, 631 SCRA 596.

Kukan International Corporation v. Reyes, supra, at 617-618.

70

71
G.R. No. 97412, July 12, 1994, 234 SCRA 78.
72
G.R. No. 189871, August 13, 2013, 703 SCRA 439.

Eastern Shipping Lines v. Court of Appeals, supra note 71, at 80-81.

73

Nacar v. Gallery Frames, supra, note 72, at 457-458.

74

Id. at 458.
75

76
This is the date of petitioner’s first demand letter to respondent company.
77
According to Nacar v. Gallery Frames, “in the absence of an express stipulation as to
the rate of interest that would govern the parties, the rate of legal interest for loans or
forbearance of any money, goods or credits and the rate allowed in judgments shall no
longer be twelve percent (12%) per annum - as reflected in the case of Eastern
Shipping Lines and Subsection X305.1 of the Manual of Regulations for Banks and
Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank
Financial Institutions, before its amendment by BSP-MB Circular No. 799 - but will now
be six percent (6%) per annum effective July 1, 2013. It should be noted,
nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal
interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate
of six percent (6%) per annum shall be the prevailing rate of interest when
applicable.” (Emphasis supplied)

Id.
78

79
Such interest is imposed by reason of the Court’s decision and takes the nature of a
judicial debt.