RODZON MARKETING CORPORATION, PLAINTIFF-APPELLEE, VS. NOEL PONDEVIDA, DEFENDANT-APPELLANT.
LAMPAS PERALTA, J.:
THE ANTECEDENTS
Plaintiff-appellee is a domestic corporation engaged in distribution and sale of assorted consumable products, including the manufacturing, distribution and sale of Ludy’s Peanut Butter and Ludy’s Coco Jam.[3] On the other hand, defendant-appellant was a former employee of plaintiff-appellee who started in 1987 as merchandiser. From 1998 until July 15, 2006, defendant-appellant was the Sales Supervisor for Mindanao.[4]
On October 11, 2006, defendant-appellant filed a complaint for illegal dismissal against plaintiff-appellee with the Regional Arbitration Board, Cagayan De Oro City, docketed as NLRC Case No. RAB 10-11-00675-2006.[5] In a Decision dated December 20, 2007,[6] the labor arbiter found defendant-appellant illegally dismissed by plaintiff-appellee when the latter directed the former to turn-over all the company properties in his possession to the Sales Supervisor for the Visayas.
In a Resolution dated December 24, 2008[7] in NLRC MAC-03-010133-2008, the National Labor Relations Commission (NLRC) affirmed the labor arbiter’s finding that defendant-appellee was illegally dismissed, but modified the amount of monetary award. In the same Resolution, the NLRC denied plaintiff-appellee’s counterclaim for defendant-appellant’s alleged share in the bad debts accounts amounting to Php70,915.78, on the ground that the accounts receivable written off as bad debts were recognized by the former after the latter’s employment was illegally terminated.[8]
During the pendency of plaintiff-appellee’s appeal before the NLRC, or on October 24, 2008, plaintiff-appellee filed with the trial court a Complaint[9] for sum of money against defendant-appellant, alleging that (i) under plaintiff-appellee’s Credit Sales Policies dated April 5, 1994, defendant-appellant was liable for bad debts accounts equivalent to 5% of the uncollected sales transaction as of June 30, 2007 amounting to Php7,538,893.65 and 12.50% of the uncollected credit sales extended to a new customer amounting to Php2,757,433.35, but the latter failed to pay the same despite repeated demands, and (ii) because of defendant-appellant’s disregard of the Credit Sales Policies dated April 5, 1994, plaintiff-appellee suffered loss of income equivalent to 10% of Php10,296,277.00, but defendant-appellant failed to pay the same despite repeated demands. Plaintiff-appellee prayed that defendant-appellant be ordered to pay its money claims, exemplary damages, attorney’s fees and cost of suit.
On March 11, 2009, defendant-appellant filed his Answer,[10] praying for dismissal of the complaint for the reasons that (i) plaintiff-appellee’s representative had no legal personality to sue; (ii) plaintiff-appellee was guilty of forum shopping for deliberately concealing the existence of a labor case between the parties; (iii) the Credit Sales Policies dated April 5, 1994 was contrary to law, public policy, anti-labor and iniquitous as plaintiff-appellee may collect twice for there was no provision that bad debts charged to sales personnel would be returned if the same was subsequently collected; (iv) plaintiff-appellee had no cause of action against defendant-appellant as there existed no debtor-creditor relations between them; (v) plaintiff-appellee cannot enforce said office policy to a dismissed employee; (vi) no consent/consideration existed between the parties upon which the obligation may be demanded; (vii) plaintiff-appellee failed to implead the salesmen responsible for the bad debts, the alleged indispensable parties; (viii) even assuming that the Credit Sales Policies dated April 5, 1994 was valid and effective, plaintiff-appellee should have first collect from, and exhaust the properties of, the non-paying customers before proceeding against defendant-appellant; (ix) the failure to collect receivables was due to termination of employment of defendant-appellant; and, (x) the complaint was filed as leverage against the labor case filed by defendant-appellant against plaintiff-appellee. As counterclaim, defendant-appellant prayed for moral and exemplary damages and attorney’s fees.
On April 29, 2011, before the scheduled pre-trial, defendant-appellant filed a Motion for Postponement and Apology.[11] During the scheduled pre-trial on May 3, 2011, the trial court issued an Order[12] denying said motion for failure of defendant-appellant’s counsel to comply with the three-day notice rule. In the same Order, the trial court allowed plaintiff-appellee to present its evidence ex-parte.
On June 17, 2011, defendant-appellant filed a Motion for Reconsideration[13] of the Order dated May 3, 2011, but the same was denied by the trial court in an Order dated June 21, 2011.[14]
During the ex-parte presentation of its evidence, plaintiff-appellee presented (i) Eleanor Timajo, former Head of plaintiff-appellee’s Credit and Collection Department;[15] (ii) Jun Lalo, former OIC and Head of plaintiff-appellee’s Audit Department;[16] (iii) Salvacion Elesterio, plaintiff-appellee’s Warehouse Supervisor;[17] and, (iv) Myrna Carsolin, plaintiff-appellant’s representative and Legal and Administrative Assistant.[18]
In a Decision dated May 30, 2012, the trial court held defendant-appellant liable to plaintiff-appellee under the Credit Sales Policies, but the claims for attorney’s fees, exemplary damages and loss of income were denied for failure of plaintiff-appellee to present evidence to substantiate the same. Thus:
“WHEREFORE, judgment is rendered in favor of the plaintiff. Accordingly, defendant is ordered to pay the plaintiff the sum of SEVEN HUNDRED TWENTY ONE THOUSAND SIX HUNDRED TWENTY THREE and 85/100 PESOS (Php721,623.85) plus legal interest at the rate of six percent (6%) per annum until fully paid.
SO ORDERED.“[19]
Defendant-appellant filed a Motion for Reconsideration,[20] but the same was denied by the trial court in an Order dated January 8, 2013.
Thereupon, defendant-appellant filed this appeal[21] which is premised on the following assignment of errors:
1) THE LOWER COURT HAS ERRED IN HOLDING THAT THE “SALES CREDIT POLICY” IS A CONTRACT WHICH HAS THE FORCE AND EFFECT OF LAW BETWEEN THE CONTRACTING PARTIES;
2) THE LOWER COURT HAS ERRED IN NOT DISMISSING THE CASE, – – ASSUMING THAT THE “SALES CREDIT POLICY” IS A CONTRACT – -, FOR LACK OF JURISDICTION, AS THE LABOR ARBITRATION BOARD/NATIONAL LABOR RELATIONS COMMISSION HAS THE EXCLUSIVE AND ORIGINAL JURISDICTION FOR ALL EMPLOYMENT CONTRACTS PURSUANT TO ARTICLES 217 AND 218 OF THE LABOR CODE OF THE PHILIPPINES;
3) THAT LOWER COURT HAS ERRED IN NOT DISMISSING THE CASE ON THE GROUND OF FORUM SHOPPING/OR PRECLUSION OF JUDGMENT;
4) THE LOWER COURT DELIBERATELY IGNORED THE FACT THE “SALES CREDIT POLICY” IS NULL AND VOID, FOR BEING CONTRARY TO MORALS, PUBLIC POLICY, INIQUITOUS AND PATENTLY UNJUST, EVEN ASSUMING THAT IT IS A CONTRACT;
5) THE LOWER COURT FAILED TO APPRECIATE THAT THERE WAS FAILURE TO IMPLEAD INDISPENSABLE PARTIES;
6) THE EVIDENCE AGAINST DEFENDANT-APPELLANT IS INSUFFICIENT TO WARRANT A FAVORABLE DECISION.[22]
THE ISSUE
Whether the trial court erred in finding that defendant-appellant is liable to plaintiff-appellee under the latter’s Credit Sales Policies.
THE COURT’S RULING
In holding defendant-appellant liable to plaintiff-appellee for his share in the latter’s bad debts, the trial court noted that plaintiff-appellee was able to prove by preponderance of evidence the existence of Sales Credit Policies, defendant-appellant extended credits to customers in the amount of Php10,296,327.00 which remained uncollected, and defendant-appellant failed to refute his liabilities for failure of his counsel to appear during pre-trial despite due notice. Thus:
“By preponderance of evidence, plaintiff was able to establish the fact that Pondevida extended credits to customers in the total amount of Php10,296,327.00, which remained uncollected. Under the Sales and Credit Policy, Php721,623.85 shall be the proportionate share of Pondevida.
Unfortunately, defendant failed to refute his liabilities due to his counsel’s failure to appear for pre-trial despite notice.
Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.
As shown by the demand letter presented by the plaintiff, the total amount claim was Php10,296,277.00, which represents the total uncollected amount in the Mindanao area, over which, Pondevida was the sales supervisor.
Under the Sales and Credit Policy, the sales on credit which remained uncollected, in full or in part, shall be considered as bad debts and will be shared by the corporation and the sales personnel on a 60/40 sharing. On the 40% charge to the sales personnel, the supervisor will be liable and will be charge 5% of the said uncollected amount.
As further agreed upon, when sales personnel extends credit limit to customers without the approval of the corporation, and the credit remains uncollected, the whole amount shall be shouldered by the sales personnel in such area, out of which, 12.5% will be charged against and collected from the supervisor.
Under the agreed policy, the total amount of Pondevida’s obligation is Php721,623.85 and not Php10,296,277.00 as claimed by plaintiff’s corporation in the demand letter.”[23]
Defendant-appellant faults the trial court in so ruling. Allegedly, (i) the Credit Sales Policies “is not a contract at all but just an office ‘policy’ dictated solely by plaintiff-appellee that governs the norms of conduct, office and functions of the employees/salesmen of plaintiff-appellee;”[24] (ii) exclusive and original jurisdiction is with the labor arbiter/National Labor Relations Commission as “the causes of action are founded of (sic) the terms and conditions of employment, and therefore, an ’employment contract'”[25] and “in fact, the issues raised in the complaint were merely a rehash of the issues raised by plaintiff-appellee x x x of (sic) that labor case filed by defendant-appellant against plaintiff-appellee;”[26] (iii) the filing of the complaint for sum of money “amounts to forum-shopping or barred by a prior judgment, if not, amounts to multiplicity of suits”[27] as plaintiff-appellee “deliberately concealed x x x in its Verification and Certification of Non-Forum Shopping”[28] “the existence of that Labor Case involving the same parties;”[29] (iv) “plaintiff should have included its field personnel who negotiated for these transactions and the clients, precisely because they are the principal parties to these transactions/contracts, for without them, the transactions would not be materialized;”[30] (v) “the lower court deliberately ignored the fact that the ‘Sales and Credit Policy’ is null and void, for being contrary to morals, public policy, iniquitous and patently unjust;”[31] and, (vi) “the evidence thus adduced is insufficient to warrant a favorable verdict”[32] in favor of plaintiff-appellee and “the fact x x x that defendant did not cross-examine the witnesses is of no moment [,] for the rule still remains that the burden of proof still rests on the plaintiff to prove its affirmative allegations by competent and convincing evidence.”[33]
The petition has merit.
It is a basic rule that in civil cases, the burden of proof is on the plaintiff to establish his case by preponderance of evidence.[34] 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.[35] It is a phrase which, in the last analysis, means probability of the truth. It is evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto.[36]
Under Section 1, Rule 133, Revised Rules of Evidence, the following is to be considered in determining preponderance of evidence:
“x x x In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.”
Plaintiff-appellee failed to prove by preponderance of evidence that the subject of the complaint for collection of sum of money and damages were bad debts, or accounts receivables that were written-off. Although the trial court allowed plaintiff-appellee to present its evidence ex-parte for failure of defendant-appellant to appear during the rescheduled pre-trial, plaintiff-appellee still has to prove its allegations in its petition by preponderance of evidence. In Saguid vs. Court of Appeals,[37] wherein respondent therein was allowed to present her evidence ex-parte, the Supreme Court stressed:
“As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the party’s own evidence and not upon the weakness of the opponent’s defense. This applies with more vigor where, as in the instant case, the plaintiff was allowed to present evidence ex parte. The plaintiff is not automatically entitled to the relief prayed for. The law gives the defendant some measure of protection as the plaintiff must still prove the allegations in the complaint. Favorable relief can be granted only after the court is convinced that the facts proven by the plaintiff warrant such relief. Indeed, the party alleging a fact has the burden of proving it and a mere allegation is not evidence.”
Plaintiff-appellee filed the collection case to collect from defendant-appellant the latter’s share in plaintiff-appellee’s bad debts under the Sales Credit Policies dated April 5, 1994, which pertinently provides:
Sales on credit which have remained uncollected, in full or in part, and subsequently written off are called BAD DEBTS. Responsibility and/or liability of sales personnel on bad debts are defined as follows:
In support of its claim totalling Php721,623.85, representing defendant-appellant’s (i) 5% share in the bad debts of sales personnel reporting under defendant-appellant amounting to Php7,538,893.65 as of June 30, 2007, and (ii) 12.50% share in the bad debts from credit sales extended to Kyn and Marketing which as of June 30, 2007 had a balance of Php2,757,433.35, plaintiff-appellee presented during the ex-parte hearing two (2) sets of documents, to wit:
The foregoing documents, however, cannot be considered as proof that the amounts of Php7,538,893.65 and Php2,757,433.35 were plaintiff-appellee’s bad debts arising from (i) uncollected accounts of sales personnel reporting under defendant-appellant, and (ii) credits extended to a new customer in violation of the Credit Sales Policies, respectively. The documents merely showed the balance of the accounts receivable as of June 30, 2007. The individual ledger accounts should have been presented to show the details of the alleged uncollected credit sales invoices. This, plaintiff-appellee failed to do.
Notably, while plaintiff-appellee alleged in its petition for review on certiorari[41] before the Supreme Court that it had entered into a Compromise Agreement in Criminal Cases No. 124133-E2006 to 124344-E 2006 (12 counts for Violation of Batas Pambansa Blg. 22) with Rosello Comoda, the owner of Kyn and Marketing,[42] there was no document showing that the balance as of June 30, 2007 of Php2,757,433.35 was net of said compromise agreement.
The testimonies of plaintiff-appellee’s witnesses Eleanor Timajo, Jun Lalo, Salvacion Elesterio and Myrna Carsolin are not evidence that plaintiff-appellee had a total bad debts of Php10,296,327.00 as of June 30, 2007. Eleanor Timajo, former Head of plaintiff-appellee’s Credit and Collection Department,[43] merely identified the Credit Sales Policies, while Jun Lalo, former OIC and Head of plaintiff-appellee’s Audit Department,[44] merely testified that the Credit Sales Policies was effective and applied to all employees. In her testimony, Salvacion Elesterio, plaintiff-appellee’s Warehouse Supervisor,[45] stated that she was the one of prepared the AR Listings, which as previously pointed out was merely the balance of accounts receivable as of June 30, 2007. Myrna Carsolin, plaintiff-appellant’s representative and Legal and Administrative Assistant,[46] merely identified the demand letter and the Secretary’s Certificate authorizing her to file the collection case against respondent.
In sum, the trial court’s ruling on defendant-appellant’s liability to plaintiff-appellee under the Credit Sales Policies, is unsupported by the evidence and must be reversed.
WHEREFORE, the trial court’s Decision dated May 20, 2012 and Order dated January 8, 2013 are REVERSED and SET ASIDE. Accordingly, plaintiff-appellant’s complaint for collection of sum of money and damages is DISMISSED.
SO ORDERED.
Acosta, and Garcia-Fernandez, JJ., concur.
[1] pp. 31-35, Rollo; pp. 267-271, Record
[2] pp. 447-449, Record
[3] pp. 2-3, 17-18, 280, 284-285, 299, 319, 351, 355-356, 369 and 394, Id.
[4] pp. 280, 285, 299, 320, 351, 356, 370 and 394, Id.
[5] See: pp. 284, 279, 304, 350, 356 and 399, Id.
[6] pp. 279-283 and 350-354, Id.
[7] pp. 284-296 and 355-367, Id.
[8] pp. 294 and 365, Id.
In a Decision dated January 28, 2011 (pp. 318-327 and 368-377, Id.) and Resolution dated August 2, 2011 (pp. 328-329 and 378-379, Id.), the then Twenty-Second (22nd) Division of the Court of Appeals dismissed the petition for certiorari (docketed as CA-G.R. No. 02974-MIN) filed by plaintiff-appellee seeking the nullification of the NLRC Resolution dated December 24, 2008.
In a petition for review on certiorari (pp. 297-317 and 392-414, Id.) before the Supreme Court, plaintiff-appellee argued, among others, that defendant-appellant was retrenched for lack of trust and confidence for allowing the receivables from old customers to reach to Php7,538,893.65 and a new customer to purchase on credit in the total amount of Php2,757,433.35,in violation of the company’s Credit Sales Policies dated April 5, 1994.
[9] pp. 2-10 and 17-25, Id.
[10] pp. 52-58 and 59-65, Id.
[11] pp. 188-189 and 190-191, Id.
[12] p. 193, Id.
[13] pp. 195-198 and 199-202, Id.
[14] pp. 205-206 and 207-208, Id.
[15] TSN dated June 21, 2011, pp. 4-25; TSN dated September 6, 2011, pp. 6-14
[16] TSN dated September 6, 2011, pp. 14-27
[17] TSN dated September 22, 2011, pp. 4-9
[18] TSN dated September 22, 2011, pp. 9-15
[19] p. 35, Rollo; p. 271, Record
[20] pp. 272-278 and 343-349, Record
[21] Notice of Appeal, pp. 450-451, 454-455 and 456-457, Id.
[22] p. 20, Rollo
[23] pp. 34-35, Rollo; pp. 270-271, Record
[24] p. 21, Rollo
[25] p. 22, Id.
[26] p. 23, Id.
[27] Id.
[28] Id.
[29] p. 24, Id.
[30] p. 25, Id.
[31] p. 26, Id.
[32] p. 27, Id.
[33] p. 28, Id.
[34] Luga vs. Arciaga, 654 SCRA 661, July 27, 2011
[35] Republic vs. Reyes-Bakunawa, 704 SCRA 163, August 28, 2013
[36] Chua vs. B.E. San Diego, Inc., 695 SCRA 408, April 10, 2013
[37] 430 SCRA 678, June 10, 2003, cited in Franco-Cruz vs. Court of Appeals, 565 SCRA 531, September 17, 2008
[38] Exh. “A”, pp. 12-13, 27-28 and 259-260, Record
[39] Exh. “B”, pp. 15, 30 and 262, Id.
[40] Exh. “C”, pp. 16, 30 and 263, Id.
[41] pp. 392-408, Id.
[42] p. 396, Id.
[43] TSN dated June 21, 2011, pp. 4-25; TSN dated September 6, 2011, pp. 6-14
[44] TSN dated September 6, 2011, pp. 14-27
[45] TSN dated September 22, 2011, pp. 4-9
[46] TSN dated September 22, 2011, pp. 9-15