G.R. No. L-26292. February 18, 1970
SANTIAGO VIRGINIA TOBACCO PLANTERS ASSOCIATION, INC., PLAINTIFF-APPELLEE, VS. PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION AND FARMERS’ VIRGINIA TOBACCO REDRIERS, INC., DEFENDANTS…
SANCHEZ, J.:
Primarily upon the
averment of the Government Corporate Counsel that plaintiff Santiago Virginia
Tobacco Planters Association, Inc. (hereinafter referred to as SVTPA) had
failed to present sufficient evidence to prove deliveries of seven (7)
shipments of tobacco to defendant Farmers’ Virginia Tobacco Redriers,
Inc. (FVTR) which, it is claimed, had purchased the tobacco for the other
defendant Philippine Virginia Tobacco Administration (PVTA, for short), a
government corporation, and that on the contrary, such shipments, upon which
plaintiff’s cause of action was predicated, were fictitious, PVTA came to this
Court on appeal to reverse the lower court’s judgment sentencing defendants
PVTA and FVTR, jointly and severally, to pay plaintiff the following amounts:
(a) P227,342.31, representing the value of said seven shipments of tobacco; (b)
P30, 000, as loss of profits;
(c) P10, 000 in attorneys’ fees;
and (d) the costs of the suit.
Defendant FVTR, for its part, steadfastly clings to its averment
in its answer that all the seven shipments were actually received; and that its
liability was that of agent of PVTA. FVTR’s brief assails the judgment below from two
directions: first, that although it actually received the seven
shipments, it did so merely as such agent of PVTA; and second, that if
this Court should declare that no shipment was actually received, then no
liability at all attaches to said defendant.
PVTA, a government corporation, operates under a special charter,
Republic Act 2265, entitled “An
Act Establishing the Virginia
Tobacco Administration, Defining its Objectives, Powers and Functions, And For Other Purposes.”
One objective of Republic Act 2265 is, as expressed in its Section 2(c)
“[t]o create, establish, maintain, and operate processing, warehousing and
marketing facilities in suitable centers and supervise the selling and buying of Virginia
tobacco so that the farmers will enjoy reasonable prices that secure a fair
return of their investment.”
Amongst the specific powers allocated to PVTA under Section 4(a) of the charter is “[t]o take over
and assume, and thereafter exclusively direct, supervise, and control, all
functions and operations with respect to the processing, warehousing, and
trading of Virginia tobacco, the provision of any existing law to the contrary
notwithstanding.”
On April 29, 1963,
PVTA awarded to FVTR, a private corporation, a contract for procuring, redrying, and servicing of locally grown flue-cured Virginia
tobacco for PVTA. Amongst the terms of the agreement
are: (a) that FVTR bound itself to “procure, accept and process locally
grown flue-cured Virginia leaf tobacco for the PVTA from trading entities duly
registered and authorized to trade with FVTA in accordance with PVTA plans,
circulars and schedule as nay be issued and prescribed from time to time”;[1]
(b) that payment of tobacco purchases shall be advanced by FVTR for PVTA
“to the authorized trading entities
for all flue-cured Virginia tobacco delivered to, and graded, weighed, accepted
and processed by, the CORPORATION (FVTR) under the supervision of the PVTA x x x“;[2] and (c) that in the event that FVTR
“fails to advance to the trading entities the payment of the flue-cured
Virginia tobacco in accordance with Section 2 hereof and the other payments
required of it, under paragraphs A(6) and A(7) herein, the PVTA shall pay
[the] corresponding amount directly to these entities.”[3]
Thereafter, PVTA
drew up a resolution setting forth “Conditions For
Direct Payment By The FVTA For Tobacco Deliveries Made At The FVTR Redrying Plant at Bauang, La
Union.” These conditions which were to control the trading during 1963 are as follows:
“1. FVTR shall,
by a Resolution of its Board of Directors, give a general authority to FVTA to pay
for its
account the flue-cured tobacco delivered to and accepted, redried and packed in hogsheads by the FVTR.
2. Subject to the
availability of PVTA trading funds, payment to entities shall be effected from
such funds alloted to the FVTR until the same are
exhausted and shall be made strictly in the order of the priority of acceptance of the flue-cured
tobacco shipments by FVTR at redrying
plant. A list of priority of acceptance
of the flue-cured
tobacco shipments
shall be submitted by
FVTR to PVTA, duly certified by the General Manager of the FVTR and the PVTA
Branch Manager assigned to the FVTR’s redrying
plant.
x
x x
5. Payment to
trading entities by PVTA for deliveries of flue-cured tobacco shall be made
only after FVTR has submitted to the PVTA the bill for the value of the tobacco
redried, accompanied by the following documents,
namely:
a.
Quedans
(Warehouse Receipts) and prize room reports duly certified correct by the PVTA
Branch Manager and verified correct by the GAO representative;
b.
Redriers
bill requesting reimbursement of purchases of Virginia
flue -cured leaf tobacco;
c.
General voucher for reimbursement
duly accomplished;
d. FVTR’s cost analysis;
e.
Schedule of amounts due the PVTA;
f.
Schedule of payments to be made by
the PVTA;
g.
Tally-n-sheets of tobacco
deliveries to support the schedule of payments to be made by the PVTA duly accomplished; and
h.
Computation sheets of redriers duly
accomplished to support the schedule of payments to be made by the PVTA.”[4]
Agreeably, on July 20, 1963, the FVTR board of directors
resolved to grant PVTA “authority to pay for the account of
the FVTR the flue-cured tobacco delivered to and accepted, redried, and packed in hogsheads by the FVTR for the PVTA,
provided however, that such payments shall be in accordance or tally with the
schedule of payments to be forwarded to the PVTA, and collection by the
entities shall be upon presentment by the
entity of clearance, or request for payment issued by the FVTR to the trading entity.”[5]
One of the authorized trading entities was SVTPA which obtained a
certificate as “duly affiliated and authorized to trade with the PVTA
during the 1963 tobacco trading operations.”
Dispute started when, on August
4, 1964, SVTPA requested PVTA for the payment of tobacco shipments allegedly delivered by it to
FVTR reflected in guias 28, 29, 31, 34, 35, 36, and
37 valued at P227, 342.31. Supporting
said request were certificates of delivery to and acceptance by FVTR of said
shipments signed by FVTR president Benicio C. Go.[6]
PVTA denied the request in a letter dated September 1, 1964.[7]
PVTA General Manager Eduardo Bananal there explained
that the records at the PVTA office revealed that the questioned shipments were
not received at FVTR because “there are no supporting primary
tally-sheets (accomplished in long hand by the PVTA grader thereat) received in
said [Trading] Department of the aforesaid alleged tobacco shipments.”
The PVTA letter was accompanied by a memorandum of PVTA assistant
plant manager Pio Balagot,
assigned at FVTR, informing the PVTA general manager that the alleged unpaid
shipments were not included in his report of tobacco duly received at FVTR
which he submitted to the central office (PVTA) and that the shipments listed in his report were the only
ones witnessed by the representative of PVTA at the ramps to have been really
graded, weighed and accepted at the FVTR redrying
plant during the 1963 trading operations.[8]
Stemming from this exchange of correspondence was the complaint dated August 31,
1964 filed by SVTPA with the Court of First
Instance of Rizal against PVTA and FVTR for the
recovery of the value of the seven shipments totalling
P227,342.31; loss of profits resulting from non-payment amounting to P50, 000;
P50, 000 in damages for injury to its business standing and credit; moral
damages of P30, 000; exemplary damages of P10, 000; and attorneys’ fees of
P76,000, plus interests and the costs.[9]
PVTA’s answer, inter alia, denied that deliveries mentioned in the complaint were ever made. PVTA cross-claimed
against its co-defendant FVTR in the event plaintiff’s suit would prosper.
FVTR, on the other hand, admitted all the substantial allegations
of the complaint and defended itself by the averment that it acted only as
agent.
The judgment below sentenced “the defendant Philippine
Virginia Tobacco Administration and the Farmers’ Virginia Tobacco Redriers, Inc. to pay the plaintiffs jointly and severally
the sum of P227,342.31, P30,000.00 representing loss of profits and P10, 000.00
for attorney’s fees, and the costs of this suit”, and “[f]or lack of
evidence'”, dismissed “the cross-claim of defendant PVTA.”[10]
Both defendants appealed.
1. The forefront question is whether or not plaintiff has
presented the quantum of proof necessary to establish its claim that the seven
deliveries set forth in the complaint were actually made by plaintiff and
accepted by defendant FVTR. Guidelines
would clear the way for an assessment of the evidence presented by plaintiff.
A rule that has gained acceptance is that “[t]he
burden of proof of obligations devolves upon the one who seeks to enforce their
performance, and that of their extinction upon the one opposing it.”[11] As
early as 1905, this Court has declared that “[it] is the duty of the party seeking to enforce a right
to prove that the right actually
exists.”[12] In varying language, our Rules of Court, in speaking of burden of proof in civil cases, states that
“[e]ach party must prove
his own affirmative allegations” and that “[t]he burden of proof lies on the party who would be defeated if no evidence
were given on either side.”[13] Of course, no one can deny the desirability
of the rule that the best evidence of
which each case is susceptible should be laid before the court.[14] It is
with these precepts in mind that
this Court is called upon to ascertain whether plaintiff’s evidence meets with the standard required for its case to prosper in court.
2. The seven shipments here involved, for purposes of tax
assessments, are described in Bureau of Internal Revenue Form No. 31.48 called
“guia“. Said shipments are covered by the
following guias: No. 28 valued at P30,026.03; No.
29, P30,112.24; No. 31,
P33,665.41; No. 34, P34,271.86; No. 35,
P33,206.08; No. 36, P34,283.77; and No. 37, P31,776.92, or a total value of P227,342.31.[15]
The evidence of plaintiff consists mainly of documents. These documents may be classified according
to the stages in the trading process: (a) shipping documents; (b) checklists;
and (c) tally sheet summaries.
The shipping documents are: (1) Application for inspection of
leaf tobacco, accomplished by the SVTPA manager requesting BIR to inspect the
tobacco due for delivery to the redriers; (2) The
Commercial Waybill, indicating the scheduled date of delivery of the tobacco
shipment; (3) Request for tobacco clearance, which is a form accomplished by
the SVTPA manager requesting PVTA that the delivery be made to FVTR (it is
significant to note here that as for guias 28 and 29,
the shipments were authorized for delivery not to defendant
FVTR but to other redrying plants, the Fil-Am Tobacco Corporation and the Central Cooperative Exchange);[16]
(4) Pre-sales invoice (offer to sell), accomplished by the SVTPA officers
indicating the description as to weight and grade of each bale of tobacco, and
that the same had been already inspected
by the PVTA tobacco field inspector; (5) Progressive stock and shipment control
form of SVTPA enumerating therein the tobacco acquisitions and sales withdrawal
of said company for a certain period of
time; (6) Abstract of daily purchases, which is a list of the names of
the planters from whom the tobacco
were supposedly purchased; and (7) Ten-day report of Virginia tobacco purchases, which is
merely a ten-day summary report
of the entries in the abstract
of daily purchases.
The checklists, on the other
hand, are accomplished at FVTR as soon as the shipping documents mentioned
above are delivered for processing and they merely indicate that the shipping
documents are complete and in order.
The third set of documents presented by SVTPA was the tally sheet summary. This was prepared by FVTR based on the
primary tally sheets prepared at the FVTR
ramps after the supposed
delivery, weighing, grading and acceptance of the tobacco. These tally sheet summaries, Exhibits RRR to XXX, were signed only by the FVTR checker, processor/
computer and accountant. No official of
PVTA certified as to the correctness of these tally sheet summaries.
Is there then sufficient evidence of delivery? The importance of
the aforementioned documents in relation to the fact in issue can be gathered from the trading process
between SVTPA and FVTR. This process was
reconstructed by the plaintiff’s witnesses as well as the officials of
PVTA. The outline of the manner of
trading is as follows: SVTPA would purchase tobacco from planters who are
mostly members of said association.
Payment to these farmers would be held up until SVTPA could deliver the
tobacco to, and was paid by, FVTR. When
the tobacco is ready to be sold
to PVTA through FVTR, SVTPA would file an application for inspection of leaf
tobacco with the Bureau of Internal Revenue.
After which SVTPA would request for another inspection with the PVTA
field inspector. This is followed by
another inspection by the provincial tobacco agent for clearance to
deliver. When the shipping documents and
inspection papers enumerated above are ready, the tobacco is loaded in trucks
and sent to the redrying plant of FVTR. There, the SVTPA representative would present
the shipping documents mentioned above at the FVTR office for processing. A checklist is prepared for each set of
documents for the corresponding guia to
determine whether they are in order. In
the meanwhile, the tobacco is unloaded and made ready for weighing and grading.
The delivered tobacco undergoes another procedure. Each bale is graded, weighed and accepted for
deposit at the FVTR ramps. As each bale
is graded and weighed, the actual grade and weight are noted down, in long
hand, in the weighers‘ tally sheets which are
accomplished in quadruplicate. These weighers‘ tally sheets are signed and certified correct by
FVTR and PVTA officials or employees who made the actual weighing and
grading. Upon acceptance of the tobacco
for deposit at the FVTR warehouse, the warehouse receipt or quedan
is duly accomplished and issued
to the shipper. Thereafter, FVTR
prepares in typewritten form the tally sheet summary in its office on the basis
of the copy of the weighers‘ tally sheet issued to
it. When the time to collect comes, it
is the official tally sheet that is usually presented to PVTA and made the
basis for the payment of the tobacco shipment.[17]
The PVTA head of the Trading Department, Quirico T. Samonte, testified that the presentation of the ramp tally
sheets was required after PVTA officials learned of irregularities in trading.[18]
It can be seen, therefore, that the shipping documents and the
checklists are all accomplished prior to delivery of the tobacco. These documents are inconclusive in proving
the fact of delivery. The shipping
documents have something to do only with the preparatory transactions before
the tobacco is actually delivered and accepted at the FVTR ramps. At most, they only prove that SVTPA was in
possession of the tobacco and that it could have made deliveries to FVTR. But this does not prove actual delivery. Proof that an act could have been done is no
proof that it was done.[19] Such shipping documents and checklists will
not stand at par with the documents accomplished when actual delivery and
acceptance are made these documents are the weighers‘
tally sheet and the warehouse receipts or quedans.
Nor may the tally sheet summary be of any significance. The contents of the tally sheet summary were
supposed to have been merely copied from the weighers‘
tally sheets prepared right at the ramps.
The inability of SVTPA to produce the original of the weighers‘ tally sheets or even explain its non-production
creates the impression that no delivery was actually made. As testified to by plaintiff’s
witness Maria Malabanan, the weighers‘
tally sheets are prepared at the same time that the weighing and grading of the
delivered tobacco are made in the presence of the respective grader and the weigher of FVTR and PVTA.[20] The officials of PVTA testified that these
tally sheets are accomplished in quadruplicate.
SVTPA, FVTR, PVTA Financing Department and the PVTA Ramp Manager
assigned at FVTR are each furnished a copy of the tally sheets.[21] This is not questioned by SVTPA. It is from this copy of the weighers‘ tally sheet furnished SVTPA that the tally sheet summary is prepared. There is no reason, therefore, for SVTPA or FVTR not to have presented its copy of
the original weighers‘ tally sheet if as it is
claimed the delivery had been made.
3. The trading process points to two documents which are
susceptible of proving the fact in issue, which is delivery. These are the ramp or weighers‘
tally sheets aforesaid and the warehouse receipts or quedans. These
tally sheets, it needs to be emphasized, are signed and certified
correct by the FVTR and the PVTA grader and weigher Who makes the actual weighing and grading. Upon the acceptance of the tobacco for
deposit at the FVTR’s warehouse, a warehouse receipt
or quedan is
issued to SVTPA. The actual
presence of the tobacco delivered and accepted at FVTR’s
ramps and deposited at the FVTR warehouse was not checked. And this, because of the permission granted to all trading entities to mix their
tobacco with those of other redrying plants.[22] Which rendered
identification impossible. Actual
physical examination would not produce any result.
The best evidence available, therefore, is that which relates
directly or has a direct connection with the delivery. And these are the documents prepared at the moment
of delivery and which affirm the presence of the tobacco delivered at the FVTR
warehouse. In Kneedler
vs. Paterno, 85 Phil. 183, 190, the
checks were held to be the primary or the best evidence to prove the fact of
payment and must be produced or its non-production convincingly explained.
But the importance of the quedans and
the weighers‘ tally sheets is not limited to their
probative value. These quedans and tally sheets are the very same documents agreed
upon between FVTR and SVTPA as amongst those to be produced and presented and
surrendered before PVTA may make direct payments to trading entities.[23] The failure of FVTR and SVTPA to produce
these documents negates the insistent admission of FVTR that the alleged
shipments were actually delivered. SVTPA
knew beforehand of the conditions for direct payment by PVTA.[24] Both SVTPA and FVTR are bound by these
conditions. PVTA is, therefore, cleared of any liability.
And more. These tally sheets and quedans
were intended to safeguard the interest of the government against unlawful
disbursements of funds for purchases which were never effected. SVTPA and FVTR should have known that the
fate of their case hinges on these two documents. Said documents were also for their own protection.
And yet, neither could produce them, even as FVTR in the course of the pre-trial promised to present one of them, the quedans. FVTR in fact admitted that
“lack of quedans is absolute evidence that there
are no tobacco in the warehouse.”[25] Quedans there must be. The quedans then
must be presented.
Finding that direct and sufficient evidence by plaintiff is wanting, the claim cannot prosper. Plaintiff failed to discharge its burden.
4. But the claim of delivery is not alone contradicted by the
absence of the ramp tally sheets and
the quedans.
Other proofs there are to counter plaintiff’s unsatisfactory evidence that there were indeed
shipments and that delivery was actually made.
First. Not one of the witnesses presented and
offered by SVTPA as rebuttal could categorically state that the tobacco in
question was actually delivered. One
witness could only state that sometime in 1963 he saw trucks belonging to SVTPA inside the FVTR compound loaded with tobacco. Another also testified that he saw tobacco
belonging to SVTPA being graded at the FVTR ramps. But then, the disputed shipments were not the
only shipments of SVTPA. There were other shipments of SVTPA in 1963 which
were already paid by PVTA such as shipments represented by guia
32 and guia 33 for which checks had been issued by
PVTA. There is need therefore to
identify which particular shipment was seen by the witness.
The witnesses were unable to give a particular description of
the tobacco or the shipments they saw.
Their testimony therefore
cannot be given much weight. For even if
one were to believe that SVTPA indeed delivered tobacco under guias 32 and 33, it does not give rise to the implication
that similar commodities upon guias 28, 29, 31, 34,
35, 36 and 37 were also delivered. For,
it is an evidentiary rule that “[e]vidence that
one did or omitted to do a certain thing at one time is not admissible to prove that he did or omitted to do the same
or a similar thing at another time.”[26]
Second. PVTA
offered the depositions and affidavits[27]
of a number of the planters – forty of them – from whom the alleged tobacco was
purchased by SVTPA. In their statements, the planters denied
having supplied to SVTPA tobacco
represented in the SVTPA purchase invoice and vouchers and even disowned the
signatures appearing above their names typewritten in said purchase vouchers
offered as exhibits by SVTPA. These depositions and affidavits are
reinforced by expert testimony given by
Pedro Elvas, a captain in the Philippine
Constabulary, [28] to the effect that the signatures appearing
in the purchase vouchers were forgeries when compared with the signatures
appearing in the depositions of the planters.
Falsehoods not only quarrel with truths; they also quarrel with each
other.
The only planters who testified for SVTPA that they delivered
tobacco to SVTPA and admitted the signatures in the purchase vouchers as their
own were Patricio Agbulos, Fortunato
Carranza, [29]
Honesto Marquez, Miguel Elgarico
and Toribio Elefante.[30] Their admission hardly creates a ripple to
disturb the conclusion we have reached.
The evidence coming from an overwhelming majority of the supposed
suppliers of SVTPA did serve to cut off whatever connecting thread there
remains in plaintiff’s evidence. For,
these alleged suppliers, too, are “ghost” suppliers. And, to think of the fact that if it were
really true that they supplied tobacco to SVTPA – which in turn was allegedly
delivered to FVTR – each of these farmers stands to lose a considerable amount
of money. Had they been worshippers of
the Golden Calf, self-interest could have benumbed their souls with icy hands.
They could have said that they
did supply the tobacco. And who would be able to check their
statements? Fortunately for the
interests of justice, their thinking is that in a clash between cash and
conscience, the latter must not be dented.
Third. But one special
circumstance nails down the case for defendant PVTA, and that is, the fact that
guias 28 and 29 were
not for tobacco to be delivered to FVTR; they were cleared for delivery to
other redriers.
A clear case indeed of a false claim.
It is here that the following, the teaching from De Leon vs. Juyco, 73
Phil. 588, 595, citing I Wigmore on
Evidence, sec. 277, pp. 566-568,
finds relevancy, viz: “A party’s
falsehood or other fraud in the preparation and presentation of his cause, his
fabrication or suspension of evidence
by bribery or spoliation, and all similar conduct, is receivable against him as
an indication of his
consciousness that his case is weak or unfounded, and from that consciousness may be inferred the
fact itself of the cause’s lack of truth and merit.”
For the reasons given, the judgment under review is hereby
reversed, and plaintiff’s complaint is hereby dismissed.
Costs in both instances jointly and severally
to be paid by plaintiff and defendant FVTR.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Ruiz Castro, Fernando, Teehankee,
and Barredo, JJ., concur.
Villamor, J., no part.
[1]
Management contract, stipulation A, paragraph 1.
[2]
Id., paragraph 2.
[3]
Id., paragraph 2;
emphasis supplied.
[4]
Annex D of the Complaint, R.A., pp. 40-43.
[5]
Annex F of the Complaint, R.A., pp. 45-46.
[6]
Annexes H and I of the Complaint, Exhibits YYY and ZZZ, Folder 9 of Roll of
Exhibits.
[7]
Exhibit BBBB.
[8]
Exhibit BBBB -1.
[9]
Civil Case Q-8231, Court of First
Instance of Rizal, Branch IV, Quezon
City, entitled “Santiago Virginia Tobacco Planters
Association, Inc., Plaintiff, versus Philippine Virginia Tobacco Administration
and Farmers’ Virginia Redriers, Inc.,
Defendants.”
[10]
R.A., p. 203.
[11]
Article 1214, Old
Civil Code.
[12]
Parrado vs. Jo-Juayco
y Juaya, 4 Phil. 710, 712. See also:
Fisher, Civil Code of Spain with Philippine Notes, 4th ed., p. 411, citing Tuason
vs. Uson, 7 Phil. 85; Sanz
vs. Lavin y Hnos, 6
Phil. 299; Uy Piaoco vs.
Osmeña, 9 Phil. 299; Ortiz vs. Melliza, 22 Phil. 132; Nicolas vs. Guerrero, 23
Phil. 178; Manuel Novo & Co. vs. Ainsworth, 26 Phil. 380; Belen vs.
Belen, 13 Phil. 202.
[13]
Section 1, Rule 131, Rules of Court.
[14]
Kneedler vs. Paterno,
85 Phil. 183, 189-190.
[15]
R.A., pp. 9-10.
[16]
See: Exhibits B, C, D, L and
N.
[17]
Tr., pp. 24-26, April 13, 1965
hearing.
[18]
Tr., pp. 203-211, May 10, 1965
hearing.
[19]
Estoque vs. Pajimula,
L-24419, July 15, 1968, 24 SCRA
59, 62.
[20]
Tr., p. 25, April 13, 1965 hearing.
[21]
Tr., pp. 113-116, May 10, 1965 hearing.
[22]
Tr., pp. 153-154, 167-169, May 10, 1965 hearing.
[23]
Annex D of the Complaint.
[24]
Tr., pp. 14, 22-23, April 13, 1965 hearing.
[25]
R.A., p. 165, FVTR’s Rejoinder to
PVTA Reply.
[26]
Section 48, Rule 130, Rules of Court.
[27]
Exhibits 221-272-PVTA.
[28]
Tr., July 29
and 31, August 4, 1965 hearings.
[29]
Tr., September 6, 1965 hearing.
[30]
Tr., September 7,
1965 hearing.