G.R. No. L-21511. June 29, 1967
GERTRUDES CARLOS, PLAINTIFF-APPELLANT, VS. OVERSEAS FACTORS INC. AND BRIGIDO P. VALENCIA, DEFENDANTS-APPELLEES.
CONCEPCION, C.J.:
Direct appeal from a decision of the Court of
First Instance of Manila dismissing plaintiff’s comÂplaint and defendant’s
counterclaim, without proÂnouncement as to costs.
On September 3 and 9, 1954,
defendant Overseas Factors, Inc. – hereinafter referred to as Overseas – a
corporation duly organized under the Philippine laws, entered, through its
president Brigido P. Valencia, into two (2) contracts
with the National Rice and Corn Corporation – hereinafter referred to as NARIC
– whereby Overseas underÂtook to supply and furnish the NARIC, under the first
contract, with 5,000 metric tons of Kangni rice, and
under the second, with 5,000 metric tons – later reduced to 2,500 metric tons –
of Joshie rice, from Pakistan, at P0.51 per ganta. At the same time, Overseas
apÂpointed the NARIC as its agent and authorized the same to sell the rice to
the public at such price as it may deem fit.
Overseas further agreed that any amount received by the NARIC over and
above said sum of P0.51 per ganta shall belong
exclusively to said agency, as compensation for its work in the disposal of the
cereal and for the use of its warehouse and distribution facilities.
Not having sufficient cash to make the marginal cash deposit and
to meet the expenses incidental to said contracts, including preÂmiums on the
surety and performance bonds therein required, on September 6, 1954, Overseas
entered into another contract, this time with Gertrudes
Carlos – hereinafter referred to as plaintiff – whereÂby the latter undertook
to make said marginal cash deposit and defray the aforementioned expenses, for
a given consideration hereinafter to be stated.
The next day – September
7, 1954 – Brigido P. Valencia executed a
supplemental undertaking, whereby he personally guaranteed to plaintiff the
performance of the obligations of Overseas in her favor.
On May 27, 1959,
plaintiff commenced the present action against Overseas and Valencia
to recover from them, jointly and severally:
1) P88,750.00, representing the balance of P103,750.00, allegedly
deposited by plaintiff with the NARIC, after deducting therefrom
the sum of P15,000.00 later refunded by the NARIC;
2) P22,515.09, representing the aggregate amount alÂlegedly paid by
plaintiff by way of premiums on bonds posted for the benefit of Overseas, under
its contract with NARIC;
3) P105,000.00 as alleged share of the plaintiff in the profits said to
have been made by Overseas in the rice transactions in question;
4) P50,000.00 for other expenses in connection with said transactions;
5) P100,000.00 as moral damages;
6) P20,000.00 as attorney’s fees; and
7) Interest on the foregoing sums.
Overseas and Valencia seasonably filed their respective answers,
admitting some allegations of the complaint and denying other allegations
thereof, as well as setting up special defenses and counterclaims.
In due course, the lower court rendered the aforementioned deciÂsion,
dismissing the complaint, for lack of cause of action, and defendants’
counterclaims. Hence,
this appeal by plaintiff.
The main question before this Court is whether or not plaintiff
has a cause of action against defendants herein. In this connection, it appears from the
records that the parties herein had, in effect, undertaken a joint venture,
whereby plaintiff agreed to finance the performance of the obligations of
Overseas in favor of the NARIC, as well as to make the marginal cash deposit
and defray all other expenses in connection with the importation of rice
adverted to above, including the payment of premiums on the surety and
performance bonds required in the contracts between Overseas and NARIC, and
that, in consideration of such undertaking, it was agreed upon, between
plaintiff and Overseas, that “all proceeds from the sale of the rice, or
connected therewith, shall be equally divided between Carlos and Overseas,
after deducting and reimbursing to each party the expenses and deposits each
may have inÂcurred,” as set forth in the contract between them, and that
“the liquidation of the proceeds shall not take place until the rice is fully
paid for by the NARIC, unless circumstances require an earlier partial
liquidation.” (Record on Appeal, pp. 12-13.)
Up to now, no such liquidation has taken place. Neither has the Overseas received from the
NARIC any amount representing the proceeds of the sales made by the
latter. In the language of the decision
appealed from:
“According to the agreement between Carlos and Overseas,
Exhibit C-Stipulation Carlos and Overseas, Exhibit 3-Stipulation Carlos and
Valencia, ‘all proceeds from the sale of the rice, or connected thereÂwith,
shall be divided equally between Carlos and OverÂseas, after deducting and
reimbursing to each party the expenses and deposits each may have incurred
therein, as above set forth’ and ‘the liquidation of the proceeds shall not
take place until the rice is fully paid for by the NARIC, unless circumstances
require an earlier partial liquidation.’
“The agreement between Carlos and Overseas therefore
specifically provides that the expenses of Carlos shall be deducted from the
proceeds of the sale of the rice and that the liquidation of the proceeds shall
not take place until the rice is fully paid for by the NARIC.
“Now, did Overseas receive anything from the NARIC on its
contract for the supply of 5,000 metric tons of Kangni
rice and 2,500 metric tons of Joshie rice? The summary of the account of Overseas
Factors, Inc. with NARIC covering the purchase of 5,000 metric tons of Kangni and 2,500 metric tons of Joshie
rice marked as Exhibit 1-Valencia and Exhibit 2-Overseas shows that the two
rice transactions resulted in a loss and that so far, NARIC had not paid
anything to Overseas as proceeds from the sale of the rice. This summary of accounts showing a liability
of P1,258,310.03 on the part of the Overseas to NARIC
on the rice deals in question has not been rebutted. In fact, it is strengthened by Exhibit N,
Stipulation Carlos-Overseas showing that NARIC had to file Civil Case No. 30244
of the Court of First Instance of Manila against Overseas and others for the
recovery of Overseas’ said liability amounting to P1,258,310.03.
“Since Carlos’ right to recover for her expenses and share of
the alleged profits is dependent upon the liquidation of the proceeds and since
there is no proof by plaintiff that proceeds from the sale of rice were paid by
NARIC to Overseas, the plaintiff has no cause of action against the defendants.
“Plaintiff’s assertion that Overseas received P150,000.00 or
P250,000.00 out of the rice deals is not supported by any evidence for the only
amount which NARIC returned to Overseas is the sum of P15,000.00, part of the
marginal deposit made by Carlos, which Overseas turned over to the latter.
“With reference to the counterclaim of the deÂfendant to the
effect that Carlos collected 50,000 rupees in Karachi from Ivlom
Corporation and which amount must be reimbursed by Carlos to Overseas because,
according to the latter, Carlos was a mere trustee of a joint venture when she received that amount, the evidence
shows that the 50,000 rupees which Carlos received from Ivlom
Corporation was delivered to Atty. Salvador Nosce,
the attorney in fact of OverÂseas in Karachi, and was spent in the case of OverÂseas
against Ivlom Corporation in Karachi so that Carlos
cannot be held liable for said 50,000 rupees.
“The counterclaims of both defendants for atÂtorney’s fees and
alleged moral damage cannot be sustained because there is no showing that the
plaintiff acted in bad faith in filing this action.
“IN VIEW OF THE FOREGOING, the Court hereby renders judgment
dismissing plaintiff’s comÂplaint and defendants’ counterclaim, without
pronounceÂment as to costs.”
Plaintiff maintains that the rice had been fully paid for by the
NARIC, because the price due to the vendor in Pakistan had been satisfied with
letters of credit issued by the NARIC for the account of the Overseas. Such payment is not, however, the one
contemplated in the contract between plaintiff and Overseas. The latter referred to payments made by the
NARIC in satisfaction of its own obligation in favor of the Overseas –
or P0.51 per ganta of the rice imported by Overseas
from Pakistan – whereas said letters of credit of the NARIC settled the debt of
Overseas in favor of the dealer in Pakistan, who had sold the rice to
Overseas. Plaintiff could not possibly
cause the amount of her deposit with the NARIC and other expenses necessary for
the importation of the rice, to be deducted from the sums paid by the NARIC, on
behalf of Overseas, to the seller of the rice in Pakistan. Much less can plaintiff’s share in such
profits as Overseas may derive from the rice transactions, be deducted from the
price thus paid by NARIC, for the account of Overseas. Said expenses and share in the profits were
to be deducted from the payments by the NARIC to the Overseas, or, at
least, from the sums due to the latter from the NARIC. As stated in the decision appealed from, no
such payment has as yet been made by the NARIC to the Overseas. Neither have the accounts between NARIC and
Overseas been liquidated. Plaintiff has
not established any such payment by NARIC to Overseas, or, at least, a
liquidation of the proceeds of the sale of the rice in question by the NARIC
to the public, not by the vendor in Pakistan to Overseas. In fact, it would seem that Overseas had
suffered losses in connection with its transactions with the NARIC. Accordingly, the lower court was justified in
finding that plaintiff has no cause of action against defendants hereÂin.
Plaintiff alleges, also, that the lower court erred in not
finding that Overseas violated its contract with her, and in not declaring that
Overseas and its officers had acted in bad faith. Upon a review of the record we are satisfied
that plaintiff has not established her pretense by a preponderance of the
evidence.
WHEREFORE, the decision appealed from should be, as it is
hereby, affirmed, with costs against plaintiff Gertrudes
Carlos.
IT IS SO ORDERED.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, and
Ruiz Castro, JJ.,
concur.