Phil. Phospate Fertilizer vs. Kamalig Resources 540 SCRA 139 [Case Digest]

 

Phil. Phospate Fertilizer vs. Kamalig Resources

540 SCRA 139

Facts:

            Kamalig purchased fertilizer products from Philphos for eventual sale to its customers. The agreement governing the business transaction consisted of advance payment to Philphos for Kamalig's purchases of fertilizer products, followed by Philphos's issuance of a Sales Official Receipt and an Authority to Withdraw, indicating the kind of fertilizer product purchased and the location of the warehouse where the merchandise would be picked up. Kamalig would subsequently resell the fertilizer products and issue to its customers the corresponding Delivery Orders signed only by its authorized officers.

            Philphos informed Kamalig of its over withdrawal of various fertilizer stocks in the supply depots in Manila and Iloilo. This consisted of 291.45 metric tons (MT) of fertilizer grade 21-0-0 from the Manila supply point and 50 MT each of fertilizer grades 14-14-14, 16-20-0, and 21-0-0 from the Iloilo supply station. According to Philphos, the cost of these overwithdrawals by Kamalig amounted to P1,016,994.21. But since Philphos also had an obligation to Kamalig in the amount of P470,348.91 representing the Capital Recovery Component, partial compensation took place by operation of law thereby reducing Kamalig's obligation to P546,645.30. Thus, Philphos demanded that this sum be settled on or before 31 July 1986, otherwise Kamalig would be charged 34% interest per annum. Kamalig, however, denied that it had exceeded its withdrawals of fertilizer and thus contended that it should not be made liable for any amount.

            RTC rendered judgment in favor of Philphos whereby ordering Kamalig to pay P546,645.30 plus interest thereof.  The RTC noted that Kamalig did not categorically deny that there were overwithdrawals of fertilizer products in its stock, and that if there were overwithdrawals, Kamalig merely claimed that it should not be at fault because some of the delivery receipts were signed by Kamalig officers who were not authorized to make such withdrawals.  CA reversed and set aside the judgment of RTC.  The Court of Appeals likewise held that there was no basis for the imposition of the 34% interest per annum on the principal claim of Philphos, the same being merely a unilateral act on the part of Philphos and no evidence was presented to show that the parties stipulated on the payment of interest.

 

 

Issue:

            Whether or not Kamalig is indebted to Philphos for the sum of P538,486.74.

 

Held:

            No.

 

Ratio:

            As with regards to Iloilo depot.  The practice of using these pre-printed delivery orders is obviously the modality in the ordinary course of business between Kamalig and Philphos. Philphos's failure to strictly observe and implement this practice precludes it from complaining of the adverse effects of such failure.

In the case at bar, withdrawals of fertilizer in quantities more than what was paid for was made possible by Philphos's failure to comply with the policy to use the prescribed forms. The danger sought to be prevented by the policy came to pass because of Philphos's non-compliance with its policy. It is of no moment that Kamalig's own authorized signatory, Mr. Supetran, Jr., accomplished the handwritten delivery orders, since the withdrawals thereon would not have been made had Philphos strictly implemented the policy and did not honor said delivery orders. As Philphos could have prevented the loss, it is but fair that it should suffer the loss. Thus, the value of the unauthorized withdrawals should be for the account of Philphos and not shifted to Kamalig.

 

As to Manila depot; it appears, however, that the representative of Kamalig who signed the Certification and Summary, Marketing Assistant Ma. Veronica Porciuncula, was not authorized to make or sign such certifications or summaries or to make any reconciliation of the records of fertilizer withdrawals, the same not being part of her functions as marketing assistant.

 

With respect to the 34% per annum interest claimed by Philphos, SC agree with the Court of Appeals that no evidence was presented that would show that the parties stipulated on the payment of interest. Under Article 1956 of the Civil Code, no interest shall be due unless it has been expressly stipulated in writing.

 

Petitioner Philippine Phosphate Fertilizer Corporation is ORDERED to PAY respondent Kamalig Resources, Inc. the amount of P411,144.84, plus legal interest from the finality of this Decision.