Section 1. Evidence defined.
– Evidence is the means, sanctioned by these rules, of ascertaining in a
judicial proceeding the truth respecting a matter of fact.
BP OIL AND CHEMICALS INTERNATIONAL PHILIPPINES, INC v. TOTAL DISTRIBUTION & LOGISTIC SYSTEMS,
INC, G.R. No. 214406, February 6, 2017
A Complaint for Sum of Money was filed by petitioner BP Oil against respondent Total
Distribution & Logistic Systems, Inc. (TDLSI) seeking to recover the sum of ₱36,440,351.79 representing
the total value of the moneys, stock and accounts receivables that TDLSI has allegedly refused to return
to BP Oil.
According to the allegations in the complaint, the defendant entered into an Agency Agreement
with BP Singapore, whereby it was given the right to act as the exclusive agent of the latter for the sales
and distribution of its industrial lubricants in the Philippines for a period of five years. In return, the
defendant was supposed to meet the target sales volume set by BP Singapore for each year of the
Agreement.
When the defendant did not meet its target sales volume for the first year of the Agreement,
the plaintiff informed the defendant that it was going to appoint other distributors to sell the BP's
industrial lubricant products in the Philippines. The defendant did not object to the plan of the plaintiff
but asked for ₱10,000,000.00 as compensation for the expenses. The plaintiff did not agree to the
demand made by the defendant.
The defendant through its lawyer, wrote the plaintiff a letter where it demanded that it be paid
damages in the amount of ₱40,000,000.00 and announced that it was withholding remittance of the
sales until it was paid by the plaintiff. The plaintiff wrote the defendant back to give notice that it was
terminating the Agreement unless the defendant rectified the breaches it committed within a period of
30 days. The plaintiff also demanded that the defendant pay the plaintiff its outstanding obligations and
return the unsold stock in its possession.
The defendant, through Mr. Miguel G. de Asis, its Chief Finance Officer, wrote the plaintiff a
letter admitting that as of the said date, it had in its possession collections against sales in the amount of
₱27,261,305.75, receivables in the amount of ₱8,767,656.26 and stocks valued at ₱1,155,000.00. Thus,
the law firm of Siguion Reyna Montecillo & Ongsiako sent the defendant a formal demand letter for the
payment of the total amount of ₱36,440,351.79 representing the total amount of the collections,
receivables and stocks that defendant should have returned to the plaintiff.
The plaintiff filed the instant complaint for collection against the defendant.
The Defendant filed its Answer Ad Cautelam with Compulsory Counterclaim Ad Cautelam.
In its answer, the defendant alleged that it did not fail to meet the sales target for Year I. Delays
on the part of the plaintiff in shipping the products moved the commencement of the Agreement,
making the stipulated sales target no longer applicable. The plaintiff unexpectedly informed the
defendant of its intention to assume more control of Philippine operations, including the appointment
of a full-time representative in the Philippines and new distributors. No reason was given for this policy
change. Although the defendant pointed out to the plaintiff that the appointment of a new distributor
would violate the Agency Agreement, the plaintiff ignored the defendant's protests and affirmed that it
would proceed with taking over control of the distribution in the Philippines of BP products and with
appointing additional distributors.
RTC ruled in favor of the petitioner. After the respondent elevated the case to the CA, the latter
court reversed and set aside the decision of the RTC and found in favor of the respondent. The CA ruled,
among others, that the admission made by respondent in Exhibit "J ," that it was withholding moneys,
receivables and stocks respectively valued at ₱27,261,305.75, ₱8,767,656.26 and ₱1,155,000.00 from
petitioner, has no evidentiary weight, thus, petitioner was not able to preponderantly establish its claim.
Hence, the present petition.
According to petitioner, Exhibit "J" qualifies as an actionable document whose authenticity and
due execution were deemed admitted by respondent or TDLSI following its failure to specifically deny
the same under oath. Petitioner insists that it has met the quantum of proof required by law.
In its Comment, respondent reiterates the ruling of the CA that Exhibit "J" is not an actionable
document and cannot be considered a judicial admission on its part.
The petition is devoid of any merit.
QUESTION OF LAW IN PETITIONS FILED UNDER RULE 45; EXCEPTIONS.
The Rules of Court require that only questions of law should be raised in petitions filed under
Rule 45 (Appeal by Certiorari to the SC). This court is not a trier of facts. It will not entertain questions
of fact as the factual findings of the appellate courts are "final, binding, or conclusive on the parties
and upon this court" when supported by substantial evidence. Factual findings of the appellate courts
will not be reviewed nor disturbed on appeal to this court.
This Court's Decision in Cheesman v. Intermediate Appellate Court distinguished questions of law
from questions of fact:
As distinguished from a question of law - which exists "when the doubt or difference
arises as to what the law is on a certain state of facts" - "there is a question of fact when the
doubt or difference arises as to the truth or the falsehood of alleged facts;" or when the "query
necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation to each
other and to the whole and the probabilities of the situation."
As a general rule, it becomes improper for this court to consider factual issues: the findings of
fact of the trial court, as affirmed on appeal by the Court of Appeals, are conclusive on this court. "The
reason behind the rule is that this Court is not a trier of facts and it is not its duty to review, evaluate,
and weigh the probative value of the evidence adduced before the lower courts."
However, these rules do admit exceptions. Over time, the exceptions to these rules have
expanded. At present, there are 10 recognized exceptions that were first listed in Medina v. Mayor
Asistio, Jr.:
i. When the conclusion is a finding grounded entirely on speculation, surmises or
conjectures;
ii. When the inference made is manifestly mistaken, absurd or impossible;
iii. Where there is a grave abuse of discretion;
iv. When the judgment is based on a misapprehension of facts;
v. When the findings of fact are conflicting;
vi. When the Court of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellant and appellee;
vii. The findings of the Court of Appeals are contrary to those of the trial court;
viii. When the findings of fact are conclusions without citation of specific evidence on which
they are based;
ix. When the facts set forth in the petition as well as in the petitioner's main and reply
briefs are not disputed by the respondents; and
x. The finding of fact of the Court of Appeals is premised on the supposed absence of
evidence and is contradicted by the evidence on record.
ACTIONABLE DOCUMENT
A close reading of the present petition shows that what this Court is being asked to resolve is,
what should prevail - the findings of facts of the RTC or the findings of facts of the CA on the alleged
misapprehension of facts of the RTC. The findings of facts of both Courts are obviously conflicting,
hence, the need for this Court to rule on the present petition.
Here, the purported April 30, 2001 letter is not an actionable document per se. The present
complaint is an action for collection of sum of money arising from the termination of the Agency
Agreement between the parties. Plaintiff-appellee's cause of action is primarily based on the alleged
non-payment of outstanding debts of defendant-appellant as well as the unremitted collections/
payments and unsold stocks, despite demand. In other words, plaintiff-appellee's cause of action is not
based solely on the April 30, 2001 letter allegedly stating the "present value of stocks, collections and
accounts receivables" of defendant-appellant. Clearly, said document is not an actionable document
contemplated in Section 7, Rule 8 of the 1997 Rules of Court but is merely evidentiary in nature. As such,
there was no need for defendant-appellant to deny its genuineness and due execution under oath. We
thus cannot sustain plaintiff-appellee' s contention that the aforesaid Exhibit "J" amounted to a judicial
admission because it's due execution and authenticity was never denied under oath by defendant
appellant.
Verily, an admission is any statement of fact made by a party against its interest or unfavorable
to the conclusion for which he contends or is inconsistent with the facts alleged by him. To be
admissible, an admission must (a) involve matters of fact, and not of law; (b) be categorical and definite;
(c) be knowingly and voluntarily made; and (d) be adverse to the admitter' s interests, otherwise it
would be self-serving and inadmissible.
In this case, the alluded Exhibit "J" was introduced in evidence by plaintiff-appellee alleging in its
Complaint that under date of 30 April 2001, TDLSI wrote BP Oil a letter admitting that the following
stocks, collections and accounts receivable were still in their possession as of even date:
Amount collected against sales ₱27,261,305.75
Accounts Receivable 8,767,656.26
Estimated Value of Stocks 1,155,000.00
In its Answer Ad Cautelam with Compulsory Counterclaim Ad Cautelam, defendant-appellant
TDLSI averred, Paragraph 18 is admitted, with qualification that TDLSI's letter dated 30 April 2001 was
prepared and sent to BP Oil solely on the latter's representations that the figures were being sought only
to negotiate a settlement of the parties' dispute and end the pending arbitration. Instead, in shocking
bad faith, BP Oil refused to settle and made TDLSI's letter the basis of the instant Complaint. EXH. "J" -
only the existence of the letter sent by Defendant to Plaintiff dated April 30, 2001, signed by Miguel de
Asis is admitted. The contents as well as the factual basis thereof, are not admitted. Besides, the
circumstances leading to the sending of this letter were thoroughly explained by Miguel de Asis in his
answer to Plaintiffs written interrogatories… “Evidently, the afore-quoted letter does not, in any way,
categorically declare that the figures stated therein are "still in the possession of' or, in the hands of,
TDLSI. The "present value" of the accounts receivables, collections and stocks is one thing, the "value in
possession or on hand" of said accounts is another.”
This Court is not convinced that plaintiff-appellee BP Oil was able to preponderantly establish
its claim against defendant-appellant TDLSI in the amount of ₱36,440,351.79 for the value of the
moneys, stock and accounts receivables which the latter allegedly refused to deliver to the former. As
aptly argued by defendant-appellant TDLSI, the purported Acknowledgment Receipts and Delivery
Receipts presented by BP Oil the purpose of which is "to prove that TD LSI, through its General manager,
Mr. Ivor Williams, acknowledged receipt and delivery of the stocks" are totally baseless since the same
were never signed as having been "received by" said Mr. Ivor Williams. Hence, without the latter's
signature, the purpose for which said documents were offered becomes nil.
The above findings of the CA are partially correct.
To the mind of the Court, Exh. "J" is not an actionable document but is an evidence that may be
admissible and; hence, need not be denied under oath. Sections 7 and 8 of the 1997 Rules of Court
provide:
Section 7. Action or defense based on document. - Whenever an action or defense is
based upon a written instrument or document, the substance of such instrument or document
shall be set forth in the pleading, and the original or a copy thereof shall be attached to the
pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with
like effect be set forth in the pleading.
Section 8. How to contest such documents. - When an action or defense is founded
upon a written instrument, copied in or attached to the corresponding pleading as provided in
the preceding Section, the genuineness and due execution of the instrument shall be deemed
admitted unless the adverse party, under oath, specifically denied them, and sets forth what he
claims to be the facts, but the requirement of an oath does not apply when the adverse party
does not appear to be a party to the instrument or when compliance with an order for an
inspection of the original instrument is refused.
A document, therefore, is actionable when an action or defense is grounded upon such
written instrument or document. The complaint filed by petitioner is an action for collection of sum of
money arising from the termination of the Agency Agreement with TDLSI. The CA, therefore, was correct
when it stated that petitioner's cause of action is primarily based on the alleged non-payment of
outstanding debts of respondent as well as the unremitted collections/payments and unsold stocks,
despite demand. Thus, petitioner's cause of action is not based solely on the April 30, 2001 letter
allegedly stating the "present value of stocks, collections and accounts receivables" of TDLSI.
Noteworthy is the denial of respondent TDLSI' s Demurrer to Evidence by the RTC because it clearly
discussed petitioner's cause of action and the sufficiency of the evidence it presented, thus:
Upon consideration of the pleadings and arguments filed by the parties, the Court is convinced
to DENY the demurrer.
The record shows that the plaintiff presented sufficient evidence that will preponderantly
establish its claim against the defendant. Among the evidence presented which might prove the claim or
right to relief of the plaintiff against the defendant include (I) the purchase orders of TDLSI's third party
customers; (2) original approved copies of the requests for approval sent by TDLSI to BP Oil from May
21, 1998 to August 14, 1999; (3)TDLSI invoices covering the products subject of the purchase orders and
requests for approval; and (4) The sales invoices issued by BP Oil to TDLSI to its customers.
The aforesaid evidence presented was to the mind of the Court contain pertinent facts and such
evidence will prove that the plaintiff has a cause of action against the defendant. As correctly pointed
out by the plaintiff, TDLSI cannot premise its demurrer on any supposed lack of proof of delivery by BP
Oil of certain moneys and receivables. The allegations in the complaint, as well as the evidence
presented by BP Oil, establish that generated as they were by the sales made by TDLSI, the moneys and
receivables have always been in TDLSI's possession and it is the obligation of the latter to deliver them
to BP Oil.
The Court is of the view that the better way to weigh and decide this case based on merits is for the
defendant to present its own evidence to refute the plaintiff's allegations. It is better that the defendant
be given a day in court to prove its defenses in a full-blown trial.
The Court cannot just dismiss the case on the ground that upon the facts and law presented by the
plaintiff it was not able to show a right to relief when in fact the evidence presented, testimonial and
documentary, show otherwise and its claim appears to be meritorious. To ensure that justice would be
served and that the case be decided on its real merits upon a careful review and appreciation of facts
and evidence presented it would be best that defendant should instead present its own defenses in a
formal trial and not just to dismiss the case allegedly in the absence of clear proof that plaintiff has no
right to the reliefs prayed for.
Moreover, the Court noted that this case has been prolonged for so long and this Court can no longer
allow any more delay to this case.
WHEREFORE, premises considered, the Demurrer to Evidence is hereby DENIED for lack of merit.16
It is basic that whoever alleges a fact has the burden of proving it because a mere allegation is
not evidence. In civil cases, the burden of proof is on the party who would be defeated if no evidence
is given on either side. The RTC's denial of TDLSI's Demurrer to Evidence shows and proves that
petitioner had indeed laid a prima facie case in support of its claim. Having been ruled that petitioner's
claim is meritorious, the burden of proof, therefore, was shifted to TDLSI to controvert petitioner's
prima facie case.
The CA, however, ruled that while TDLSI admitted Exhibit "J", it nevertheless qualified and limited said
admission to, merely, the existence thereof, thus, without Exhibit "J" the same court was not convinced
that petitioner was able to preponderantly establish its claim against TDLSI in the amount of
₱36,440,351.79 for the value of the moneys, stock and accounts receivables which TDLSI allegedly
refused to deliver to petitioner. This is erroneous. The fact is, TDLSI indeed admitted the existence of
Exhibit "J." Thus, Exhibit "J" can be considered as an admission against interest. Admissions against
interest are those made by a party to a litigation or by one in privity with or identified in legal interest
with such party, and are admissible whether or not the declarant is available as a witness.19 An
admission against interest is the best evidence that affords the greatest certainty of the facts in dispute,
based on the presumption that no man would declare anything against himself unless such declaration
is true.20 It is fair to presume that the declaration corresponds with the truth, and it is his fault if it does
not.21 No doubt, admissions against interest may be refuted by the declarant.22 In this case, however,
respondent failed to refute the contents of Exhibit "J."
Be that as it may, the qualification made by respondent in the admission of Exhibit "J" is immaterial as
the contents thereof were merely corroborative of the other pieces of evidence presented by petitioner
and that respondent failed in its defense, to present evidence to defeat the claim of petitioner. As aptly
ruled by the RTC:
After going over the allegations and the evidence presented by the parties, the Court finds as it did in its
Order denying the Demurrer to Evidence of the defendant that the plaintiff presented sufficient
evidence that will preponderantly establish its claim against the defendant. The Court notes that apart
from not presenting any evidence in support of its defense, the defendant did not really put up any
serious defense to defeat the claim of the plaintiff, and its only remaining defense consisting of the right
of retention given to agents under Articles 1912, 1913 and 1914 of the Civil Code, even if proven to
exist, will not negate the finding that the plaintiff is entitled to the value of the moneys and stocks in the
defendant's possession.
To the mind of the court, the evidence presented by the plaintiff, unrebutted by any evidence on the
part of the defendant and even aided by the admissions made by the defendant in its letter dated April
30, 2001 to the plaintiff (Exhibit "J"), proves that the plaintiff has a cause of action for the payment of
the amount of Thirty-Six Million Nine Hundred Forty-Three Thousand Eight Hundred Twenty-Nine Pesos
and Thirteen Centavos (₱36,943,829.13) for the value of the stocks and the moneys received and
retained by the defendant in its possession pursuant to the Agreement with legal interest computed at
6% per annum from July 19, 2001, when formal demand (Exhibit "L") was made by the plaintiff for the
liquidatedamount of ₱36,943,829.13, up to the finality of this decision up to the date of payment
thereof.
Considering that the plaintiff was compelled to engage in litigation for almost 10 years, it must also be
indemnified for the costs of suit corresponding to filing fees in the amount of ₱429,840.00 and
attorney's fees equivalent to ₱1,500,000.00.23
PREPONDERENACE OF EVIDENCE
Section 1, Rule 133 of the Rules of Court mandates that in civil cases, the party having the burden of
proof must establish his case by a preponderance of evidence. By preponderance of evidence,
according to Raymundo v. Lunaria, [means] that the evidence as a whole adduced by one side is
superior to that of the other. It refers to 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 evidence" or
"greater weight of the credible evidence." It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.
Upon close analysis, therefore, this Court is inclined to believe the findings of the RTC that petitioner
was able to prove its case by a preponderance of evidence and that respondent failed to disprove
petitioner's claim. As such, the CA gravely erred in reversing the decision of the RTC.
INTEREST
It is important to note, however, that interest shall be compounded at the time judicial demand is made
pursuant to Article 2212 of the Civil Code of the Philippines, and sustained in Eastern Shipping Lines v.
Court of Appeals,28 then later on in Nacar v. Gallery Frames,29 save for the reduction of interest rate to
6% for loans or forbearance of money, thus:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
