THIRD DIVISION.
.
VICENTE JOSEFA,
Petitioner,
G.R.
No.
150903
December 8, 2003
-versus-
ZHANDONG TRADING
CORPORATION,
Respondent.
D E C I S I O N
SANDOVAL-GUTIERREZ,
J.:
At bar is a Petition
for Review on
Certiorari of
the Decision of the Court of Appeals dated
June 29, 2001 and its Resolution dated November 20, 2001 in CA-G.R. CV
No. 63644,[1]
entitled "Zhandong Trading Corporation vs. Vicente Josefa" for sum of
money. chanrobles virtuallaw libraryred
The facts of the case
as culled from the records are:
On June 6, 1996, Zhandong
Trading Corporation (Zhandong), respondent, filed with the Regional
Trial
Court, Branch 81, Quezon City, a complaint for sum of money against
Vicente
Josefa, petitioner, Tan Y. Ching (also known as Antonio Tan) and Evelyn
Chua (Tan's mother), docketed as Civil Case No. Q-96-27691.
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The complaint alleges
inter alia that respondent Zhandong is engaged in the importation and
sale
of hardboards/staple boards and other merchandise. In the course of its
business, its president, Eleanor Chy, met Tan, who referred petitioner
Vicente Josefa, as a client, to Chy. Relying on Tan's assurance that
petitioner
is "a good customer" and owns a construction supply store, respondent,
on various dates in February, March and April, 1996, sold and delivered
to said petitioner a total of 313 crates of boards, valued at
P4,558,100.00
payable within sixty (60) days from date of delivery. However,
petitioner,
instead of paying respondent, remitted his payments to Tan. In turn,
Tan
delivered various checks to respondent, which accepted them upon Tan's
declaration that they came from petitioner. A number of the checks
bounced.
When respondent confronted Tan, the latter issued his own checks and
those
of his mother, Evelyn Chua. Later, without any valid reason, Tan
stopped
payment by checks. Those issued by his mother bounced. This prompted
respondent
to send petitioner and Tan a demand letter dated May 14, 1996, but they
ignored it. Consequently, respondent suffered damages and was
constrained
to file the instant complaint with the assistance of counsel for a fee.chanrobles virtuallaw libraryred
In his answer, petitioner
Vicente Josefa specifically denied the allegations in the complaint. He
averred that he did not directly deal with respondent Zhandong. He
transacted
business with Tan and paid all his obligations to him. He is not privy
to the agreement between Tan and respondent; hence, if his payments
were
not remitted to the latter, it should bear the consequences. He did not
comply with respondent's demand letter because he had paid Tan in full.
As counterclaim, petitioner prayed for an award of damages as a result
of respondent's unlawful filing of the complaint and the attachment of
his properties. To protect his interest, he filed a cross-claim against
Tan.chanrobles virtuallaw libraryred
After hearing, the trial
court rendered its Decision,[2]
the dispositive portion of which reads:chanrobles virtuallaw libraryred
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"WHEREFORE, premises
considered, judgment is hereby rendered as follows:chanrobles virtuallaw libraryred
1. Ordering
defendant
Vicente Josefa to pay to the plaintiff the amount of P4,558,100.00
representing
the value of 47,980 pieces of hardboards at P95.00 per piece, with
interest
at 12% per annum from the filing of the complaint until fully paid;chanrobles virtuallaw libraryred
2. Ordering
defendant
Vicente Josefa to pay to the plaintiff the amount of P200,000.00 as
attorney's
fees plus P100,000.00 as litigation expenses;
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3. Ordering defendant
Tan Y Ching, aka Tony Tan, to reimburse to co-defendant Vicente Josefa
the amount of P4,474,200.00 which Josefa paid to Tan with interest at
the
legal rate from the date Josefa paid the amount to Tan until fully
paid.chanrobles virtuallaw libraryred
4. Dismissing the
counterclaims
of defendants Tan and Josefa for lack of merit.chanrobles virtuallaw libraryred
"SO ORDERED."chanrobles virtuallaw libraryred
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In holding that
petitioner
purchased the hardboards from respondent Zhandong and not from Tan, the
trial court ratiocinated as follows:chanrobles virtuallaw libraryred
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"While it
is
true that the sale to Josefa was negotiated by and thru' defendant Tan,
what is most significant is that there is nothing in the delivery
receipts
or sales invoices that even remotely suggests that the seller is
defendant
Tan. The delivery receipts and invoices are in Zhandong's letterhead
with
the firm name printed in big letters it can't be missed by anyone
looking
at the document, contrary to Josefa's assertion that he did not see
Zhandong's
firm name (tsn, 9-19-97, p. 8). chanrobles virtuallaw libraryred
The sales invoices
clearly
indicate that the seller is Zhandong and the buyer is Josefa. Plainly
written
across the face of the sales invoices are the words 'GOODS/STOCK BELONG
TO ZHANDONG TRADING CORPORATION UNTIL FULLY PAID' (Exhs. 'M' &
'N').
There can be no doubt at all that the seller is plaintiff Zhandong, not
Tan, and that the buyer is Josefa and not Tan. chanrobles virtuallaw libraryred
"Thus, Josefa's
claim
that he only learned later that the boards belonged to Zhandong is
without
any doubt untrue. There is also the undisputed fact that even after he
was told that he should pay directly to plaintiff Zhandong, he insisted
on paying to defendant Tan, claiming he had no liability to Zhandong
(Affidavit
of Pablito Uy, par. 3(a), p. 833, Record; tsn, 11-14-97, pp. 18 &
19).
In fact, even after he received plaintiff's demand letter on May 15,
1996,
Josefa persisted to pay defendant Tan by issuing a check dated May 18,
1996 (Exh. '18' — Josefa)."chanrobles virtuallaw libraryred
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On appeal, the Court of
Appeals affirmed the trial court's Decision. Petitioner filed a motion
for reconsideration but was denied.[3]chanrobles virtuallaw libraryred
Hence, this petition
ascribing to the Court of Appeals the following errors:chanrobles virtuallaw libraryred
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1. IN
AFFIRMING
THE RULING OF THE LOWER COURT THAT PETITIONER IS LIABLE TO THE
RESPONDENT
DESPITE "THE MOUNTAIN OF EVIDENCE" SHOWING THAT BOTH PARTIES HAD NO
BUSINESS
TRANSACTION WITH EACH OTHER AND RESPONDENT'S ADMISSION THAT TAN WAS THE
ONE WHO MADE ALL THE NEGOTIATIONS FOR THE SALE OF THE HARDBOARDS;chanrobles virtuallaw libraryred
2. IN FAILING TO
RULE
THAT TAN IS SOLELY RESPONSIBLE FOR THE PAYMENT OF THE HARDBOARDS HE
ORDERED
FROM RESPONDENT; ANDchanrobles virtuallaw libraryred
3. IN AFFIRMING
THE
DECISION OF THE TRIAL COURT HOLDING PETITIONER LIABLE FOR ATTORNEY'S
FEES
AND LITIGATION EXPENSES AND DISMISSING PETITIONER'S COUNTERCLAIM.[4]chanrobles virtuallaw libraryred
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Petitioner contends
that he transacted business directly with Tan, relying on the latter's
representation that he was the owner of the merchandise. Inasmuch as
Tan
has been his supplier for a long time, there was no reason why he
should
not believe him. Petitioner maintains that he had paid Tan for all the
hardboards delivered to him. Considering that he is not privy to the
transactions
between Tan and respondent, it follows that he is not liable for Tan's
failure to remit his payments to respondent.chanrobles virtuallaw libraryred
For its part, respondent
Zhandong counters that only questions of law, not facts, may be raised
in a petition for review on certiorari. Furthermore, findings of fact
by
the trial court, supported by substantial evidence and affirmed by the
Court of Appeals, are final and conclusive and cannot be reviewed by
this
Court.
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While it is firmly
entrenched in our jurisdiction that only questions of law may be
entertained
by this Court in a petition for review on certiorari, however, such
rule
is not ironclad and admits certain exceptions, such as when: (1) the
conclusion
is grounded on speculations, surmises or conjectures; (2) the inference
is manifestly mistaken, absurd or impossible; (3) there is grave abuse
of discretion; (4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting; (6) there is no citation of
specific
evidence on which the factual findings are based; (7) the finding of
absence
of facts is contradicted by the presence of evidence on record; (8) the
findings of the Court of Appeals are contrary to those of the trial
court;
(9) the Court of Appeals manifestly overlooked certain relevant and
undisputed
facts that, if properly considered, would justify a different
conclusion;
(10) the findings of the Court of Appeals are beyond the issues of the
case; and (11) such findings are contrary to the admissions of both
parties.[5]
Here, we find that the trial court and the Court of Appeals
misapprehended
and overlooked relevant and established facts. chanrobles virtuallaw libraryred
Evidence presented during
the hearing before the court a quo shows that Tan negotiated the sale
of
the hardboards with petitioner Vicente Josefa. Eleanor Chy, president
of
respondent Zhandong, testified on direct examination that it was Tan
who
discussed with petitioner the details of the sale — the cost of the
hardboards,
the delivery, and the terms of payment.[6]
When cross-examined, she admitted that she had no direct dealing with
petitioner
and that it was Tan who ordered the hardboards from her.[7]
She collected the payments for the hardboards, not from petitioner, but
from Tan. Thus, when the checks which Tan paid her were dishonored, she
"protested" to him and came to know that those checks were issued not
by
petitioner, but by others, thus:chanrobles virtuallaw libraryred
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"COURTchanrobles virtuallaw libraryred
Q: To cut short
the
proceedings, how was your corporation defrauded by the defendant.chanrobles virtuallaw libraryred
A: Checks were
given
to me by Mr. Antonio Tan making me believe that these checks are from
Vicente
Josefa, sir.chanrobles virtuallaw libraryred
Q: Where are those
checks?chanrobles virtuallaw libraryred
A: These checks
were
deposited and dishonored, sir.chanrobles virtuallaw libraryred
Q: Do you have
them
now?chanrobles virtuallaw libraryred
A: Mr. Antonio Tan
got
all these checks and then they were replaced again by another set of
checks,
his own checks and his mother's checks. When I presented them in our
bank,
again they were dishonored.chanrobles virtuallaw libraryred
"
x
x
x
x x
x
x x x
ATTY. CAMARA:chanrobles virtuallaw libraryred
Q: Mrs. Witness,
after
the dishonor of these checks which you have just identified before the
Honorable Court, what further action, if any, did you take?chanrobles virtuallaw libraryred
A: I personally
went
to Mr. Antonio Tan's house and protested about this matter and it was
then
that I discovered that these checks were not Josefa's but from others.chanrobles virtuallaw libraryred
Q: Which checks
are
you referring to when you said were not defendant Tan's check?chanrobles virtuallaw libraryred
A: The first batch
of
checks, sir.chanrobles virtuallaw libraryred
Q: After your
protest
about the dishonor of his checks, and about the fact that the checks
which
were given to you were not defendant Tan's but others, what further
action,
if any, did you take?chanrobles virtuallaw libraryred
A: To pacify me,
Mr.
Antonio Tan issued his own check to me and asked his own mother to
issue
several checks to me as payments, but again, these were dishonored.chanrobles virtuallaw libraryred
Q: Now, after the
dishonor
of these replacement checks, what happened next, if any?chanrobles virtuallaw libraryred
A: I made oral
demand
to Mr. Tan to make the payments but he kept on delaying the payment, so
I decided to make written demand letter dated May 14 pressuring him to
pay the deliveries which I made to 747." (Emphasis ours)[8]chanrobles virtuallaw libraryred
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It was likewise proved
during the hearing that petitioner paid Tan for all the hardboards
delivered
to him, P1,488,000.00 in cash and P2,986,200.00 in twelve (12) FEBTC
checks,
or a total of P4,474,200.00.[9]
Tan, in his answer, admitted such payments as full satisfaction of
petitioner's
obligation.[10]
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Petitioner Vicente
Josefa testified that Tan represented himself to be the owner of the
merchandise;
and that he had no reason to believe otherwise since Tan had been his
supplier
in the past. He only knew that the hardboards belonged to respondent
when
he received the latter's demand letter dated May 14, 1996.
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These circumstances
obviously indicate that Tan bought the hardboards from respondent and,
in turn, sold them to petitioner. However, both the trial court and the
Court of Appeals ignored this glaring reality and instead held that
petitioner
purchased the boards directly from respondent. Both courts based their
conclusion on the following: first, the delivery receipts covering the
hardboards are in the name of respondent Zhandong; and second, Joseph
Pe
(brother of Chy), operations manager of respondent, testified that he
personally
went to petitioner Vicente Josefa to confirm the latter's orders and
inform
him that the goods are from respondent.chanrobles virtuallaw libraryred
We cannot go along with
the conclusion drawn by both courts. Some of the delivery receipts do
not
bear the name of respondent Zhandong. Delivery Receipts Nos. 3456, 3454
and 3441[11]
evidencing the delivery of fifty-one (51) crates of hardboards bear the
name of "E.D. Hizon Customs Brokerage." If we follow the conclusion of
the courts below, then the boards covered by the said receipts belong
to
E.D. Hizon Customs Brokerage. Moreover, the delivery receipts do not
indicate
the price of the hardboards and the terms of payment. As such, they
merely
signify that the goods were to be delivered to petitioner. Indeed, they
do not ipso facto prove the existence of a perfected contract of sale
between
petitioner and respondent. Also, Pe's testimony only proves the
delivery
of the merchandise to petitioner. It does not establish that respondent
is the seller of the hardboards purchased bought by petitioner.chanrobles virtuallaw libraryred
Since petitioner had
fully paid Tan for all the hardboards, respondent Zhandong has no right
to demand payments from him. To be sure, he cannot be made responsible
for Tan's failure to pay respondent for the subject hardboards.
Contracts
take effect only between the parties, their successors in interest,
heirs
and assigns.[12]
When there is no privity of contract, there is likewise no obligation
or
liability to speak about and thus no cause of action arises.[13]
Clearly, petitioner, not being privy to the transaction between
respondent
and Tan, should not be made to answer for the latter's default.chanrobles virtuallaw libraryred
Actually, what appears
to have transpired was that Tan ordered 313 crates of hardboards from
respondent
with instructions to deliver them to petitioner's establishment; that
petitioner
paid Tan the corresponding amounts; that in turn, Tan paid respondent
with
checks which were eventually dishonored; that Chy went to Tan's house
to
protest; that Tan replaced these checks with his personal checks and
those
of his mother; and that after these checks bounced, respondent realized
that it could not collect from Tan, hence, it turned to petitioner to
recover
the amounts. As explained earlier, petitioner has no liability to
respondent.
Consequently, the latter's complaint against him cannot, in any way,
prosper
and must accordingly be dismissed. Since petitioner was able to prove
that
he paid Tan the amount of P4,474,200.00 for the hardboards, then
respondent
Zhandong should collect the amount from the latter.chanrobles virtuallaw libraryred
WHEREFORE, the petition
is GRANTED. The assailed Decision of the Court of Appeals dated June
29,
2001 in CA-G.R. CV No. 63644 affirming the Decision of the Regional
Trial
Court in Civil Case No. Q-92-27691 is REVERSED and SET ASIDE. The
complaint
in Civil Case No. Q-92-27691 against petitioner Vicente Josefa is
DISMISSED.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Vitug, Corona and
Carpio
Morales,
JJ.
, concur.chanrobles virtuallaw libraryred
____________________________
Endnotes:
[1]
Penned by Associate Justice Bernardo P. Abesamis, retired, and
concurred
in by Associate Justices Godardo A. Jacinto and Eliezer R. delos
Santos.chanrobles virtuallaw libraryred
[2]
Rollo, at 90–107.chanrobles virtuallaw libraryred
[3]
Id., at 65.chanrobles virtuallaw libraryred
[4]
Id., at 8–9.chanrobles virtuallaw libraryred
[5]
Larena vs. Mapili, G.R. No. 146341, August 7, 2003, citing Gonzales v.
Court of Appeals, 358 Phil. 806, 821, October 30, 1998; Polotan Sr. v.
Court of Appeals, 357 Phil. 250, 256–257, September 25, 1998. See also
Lacanilao v. Court of Appeals, 330 Phil. 1074, 1079–1080, September 26,
1996.chanrobles virtuallaw libraryred
[6]
TSN, June 21, 1996, p. 5.chanrobles virtuallaw libraryred
[7]
TSN, November 12, 1996, pp. 8–13.chanrobles virtuallaw libraryred
[8]
TSN, June 21, 1996, pp. 5–6, 9.chanrobles virtuallaw libraryred
[9]
Actually, the total price of the boards according to Josefa was
P4,499,200.00,
but Tan gave him a discount of P25,000.00.
[10]
Records, Vol. 1, pp. 167–173.chanrobles virtuallaw libraryred
[11]
Id., pp. 15–17; Exhibits "D," "E" and "F," for respondent.chanrobles virtuallaw libraryred
[12]
Art. 1311, Civil Code; Visayan Surety & Insurance Corp. vs. Court
of
Appeals, G.R. No. 127261, September 7, 2001.chanrobles virtuallaw libraryred
[13]
Chan vs. Maceda, G.R. No. 142591, April 30, 2003; Smith Bell Co. vs.
Court
of Appeals, G.R. No. 110668, February 6, 1997.chanrobles virtuallaw libraryred |