AMA COMPUTER COLLEGE, INC. PETITIONER, VS. VILLA GAREZA OUTDOOR ADVERTISING, RESPONDENT.
BRUSELAS, JR. J.:
“WHEREFORE, there being no reversible error, the decision appealed from is affirmed in toto.
SO ORDERED.”[3]
xxx xxx xxx
“After a careful review of the arguments raised by the plaintiff, the Court finds that the same have already been sufficiently discussed and established in the decision subject of the motion and finds therefore that there is no cogent reason or basis to disturb, modify or set aside the same.
From the premises, the Court finds the motion to be without merit, hence, it is DENIED.
SO ORDERED.”[4]
The antecedent facts of the case are as follows:
The instant petition stemmed from a sum of money Complaint[5] filed by the respondent Villa Gareza Outdoor Advertising (“Villa Gareza”) against the petitioner AMA Computer College (“AMA”) with the Metropolitan Trial Court (MeTC).
Villa Gareza, represented by its General Manager, Reynaldo S. Gareza, alleged that it was engaged in the production and marketing of outdoor and indoor display of signages. Villa Gareza’s services were engaged by AMA for the supply, fabrication and installation of panaflex signages for its Calamba, Pasig, and Las Piñas branches and for the maintenance and repair of its existing signages at its Makati branch covered by four (4) Purchase Orders. Under the terms of the Purchase Orders, AMA shall pay Villa Gareza fifty percent (50%) of the contract price and the balance shall be paid after the completion of the project. In accordance with AMA’s specifications, Villa Gareza supplied, fabricated and installed the signages within the specified time frame. AMA paid the down payments, leaving a balance in the amount of P 251,351.50. Despite demands, however, AMA failed to settle its remaining obligation. Because of the unjustified refusal of AMA to pay its obligation, Villa Gareza was constrained to engage the services of counsel to protect its right for an agreed attorney’s fees of P 50,000.00 and to incur litigation expenses and costs of suit.
In its Answer,[6] AMA denied almost all the material allegations in the complaint. It countered that there was in fact “no delivery” made by Villa Gareza because it did not accept the signages made by the former for lack of a certificate of completion, as well as other documents that were required in the determination of compliance with the specifications, details and standards of the petitioner. It prayed for the dismissal of the complaint for lack of merit and that Villa Gareza be held liable to pay AMA exemplary damages for filing an unfounded suit, attorney’s fees, appearance fees and cost of suit.
During the pre-trial conference, the parties stipulated on the following facts:
1. That AMA issued purchase order numbers 0165, 13090, 13091 and 13094 in favor of Villa Gareza;
2. That AMA partially paid for the purchase orders; and
3. The existence of the demand letter sent by Villa Gareza to AMA, demanding the latter to pay the alleged balance.
During the trial proper, Reynaldo Gareza testified that Villa Gareza was a supplier of panaflex signages of AMA; that AMA engaged its services for the fabrication and installation of panaflex signages in its Calamba, Pasig and Las Piñas branches evidenced by Purchase Order Nos. 13090, 13091 and 13094, in the amounts of P 140,000.00, P 140,000.00 and P 190,000, respectively; that the maintenance and repair of an existing signage in its Makati branch was evidenced by Purchase Order No. 0165 in the amount of P 16,351.50; that upon the receipt of the agreed upon down payments, they proceeded with the construction and installation of signages; that after the installation, Villa Gareza sent the billings to AMA; that he did not receive any complaint with regard to any defect or problem with the products; that after delivery, they negotiated for the release of the balance of their billing; that AMA’s representative by the name of Mr. Patrick made several promises to pay, but three (3) years had passed without the request being paid; that a demand letter was sent to the Finance Department of AMA and received by a certain Alma Sicam but it was ignored; that a counsel of AMA’s legal department negotiated with them and proposed for a staggered payment of the balance and was merely awaiting the approval of their President; that Villa Gareza did not have a contract with AMA for the fabrication of the signages; that the transactions were done through the issuance of purchase orders to the supplier; that a contract is not necessary because a quotation was issued; that the practice was once the quotation was received, Villa Gareza would then issue the purchase order to proceed with the fabrication; that the 50% down payment was paid one time by AMA; and that the installed signages were still existing until the time of his giving of the testimony.
Jerry Vallera, the Graphic Installer of Villa Gareza, testified that he was one of the employees who installed the signages at AMA’s Pasig, Las Piñas and Calamba branches, respectively; that he still saw the signages up to the time he testified because he would always pass by those areas; and that after they completed the installations, they informed Reynaldo Gareza for the turnover of the project to AMA.
AMA, on the other hand, presented its Marketing Director, Ferdinand Sia who testified that the purchase orders for their projects in Pasig, Calamba, Las Piñas and Makati branches lacked the necessary documents – letter of coordination, letter of turnover and completion report – needed to be submitted for proper implementation and payments; that the letter of coordination is needed for proper coordination of their department with the supplier; that the letter of turnover was the formal notice that the project was completed and to check if the project has been accomplished; that the letter of completion was a certification from the supplier that it complied with the requirements stated in the purchase order; that the documents were not attached to the record because the supplier did not submit them; that there was also no record on file with regard to any communication coming from AMA; that in their transaction with Villa Gareza, there was no formal contract, only a purchase order; and that the quotation with conforme was accepted as a document for the purchase order.
After the presentation of the parties’ respective witnesses, and admission of formal offer of evidence of AMA, the case was submitted for resolution. The MeTC then rendered a decision in favor of Villa Gareza. It held:
“WHEREFORE, premises considered, judgment is hereby rendered ordering the defendant to pay the plaintiff:
1. the amount of Two Hundred Fifty One Thousand Three Hundred Fifty One and 50/100 (P 251,351.50) Pesos representing defendant’s remaining obligation plus 12% percent interest per annum from the filing of the complaint on 24 July 2002 until fully paid;
2. the amount of P 10,000.00 as attorney’s fees; and
3. the cost of suit.SO ORDERED.”
AMA moved for the reconsideration of the decision but it was denied by the MeTC.
AMA consequently appealed to the RTC a quo but the latter court, via the assailed decision, sustained the MeTC’s decision. AMA moved for reconsideration but it was denied via the assailed order.
Hence, the instant petition.
AMA’s petition herein, however, was earlier denied due course and dismissed via Our Resolution[7] dated 08 October 2013 for its failure to: 1) indicate the date when the assailed resolution of the motion for reconsideration before the RTC was received; and 2) append a certified true copy of the decision or order of the RTC and a certified true copy of the decision or order of the MeTC as well as other relevant documents for review.
Upon AMA’s Motion for Reconsideration,[8] certified true xerox copies of the assailed decision and order as well as the MeTC’s decision were attached. The case was then referred to the Philippine Mediation Center- CA unit, for mediation proceedings but Villa Gareza’s non-compliance with the 06 June 2014 resolution was deemed as a refusal to have the case mediated. Hence, the parties were directed to file simultaneous memoranda within twenty (20) days from notice.
AMA assigns as lone error to support its petition:
“THE HONORABLE REGIONAL TRIAL COURT ERRED IN HOLDING THAT PETITIONER IS LIABLE TO PAY RESPONDENT ITS MONEY CLAIMS NOTWITHSTANDING THE LATTER’S NON-COMPLIANCE WITH THE REQUIREMENTS CONSTITUTING ‘COMPLETE’ DELIVERY.”
We find the Petition to be without merit.
AMA asserts that the records of the case show that Villa Gareza failed to make complete delivery of its obligations. It asks the Court to take a second look at the documentary and testimonial evidence presented by Villa Gareza to show the apparent failure of the latter to establish its cause by the quantum of proof required by law. AMA claims that Villa Gareza’s stance, to the effect that AMA refused to pay the obligation in bad faith, was without basis because the there was no document that would show that indeed the signages covered by the claim were delivered; and neither was there proof that the same was accepted by AMA, assuming that there was delivery, which will call for the payment of the obligation.
AMA insists that there was no written contract between the parties, other than the purchase orders issued; and that even assuming arguendo that the purchase orders were the standing contracts between the parties, it was Villa Gareza who breached the same on account of its failure to comply with the provisions as indicated in the purchase orders; that Villa Gareza be made to comply with its obligation under the Purchase Orders, particularly the submission of original copies of the purchase orders, supplier’s invoice and the receiving report from the purchaser’s campus/warehouse; and that it is only after the showing of complete delivery of all items within the specified period of time of six months from the date of the purchase orders that the terms of payment shall take effect; that the alleged delivery of the items, or the acceptance by AMA thereof, were never proven during trial; that the photographs which were used as evidence by Villa Gareza do not serve as proof that the signages were delivered and installed by Villa Gareza; and while it may have been affirmed during trial that there were existing signages in the campuses, it was not established as to who actually caused the delivery and installation or whether delivery was done within the specified period.
AMA further contends that the testimony of its witness, Sia, never confirmed that Villa Gareza installed the subject signages; that Sia even acknowledged the existence of past transactions with Villa Gareza that were paid, inasmuch as it was able to comply with the procedures; that Villa Gareza was fully aware of the procedures which AMA implements in the conduct of its business, as well as the various requirements which entail all sales transactions with suppliers; that in the event that these requirements are not satisfied, as in this case where there was no sufficient proof of complete delivery, it follows that the processing of payment is suspended; that the purchase orders that were confirmed “not delivered” were automatically canceled; that AMA has a management prerogative to implement its policies based on sound business judgment for the protection of its rights and interests; that nevertheless, the subject transactions from which Villa Gareza is claiming payment were not paid primarily for the reason that delivery was not made and the standard requirements were not complied with by the respondent; and that the latter has no one else to blame but itself for breaching its own obligation.
After a review of the case at bar, we consider AMA to have failed to raise an issue which would constitute sufficient ground to warrant the reversal of the findings of the trial courts. We do not find error in the affirmance by the RTC of the MeTC’s findings.
Petitioner AMA seeks a re-evaluation and re-calibration of the probative value of the evidence presented by the parties before the MeTC. We have to emphasize, however, that this task had been carried out by the RTC via its appellate role and had determined and sustained the MeTC’s findings of fact. We must remember that the trial court had the firsthand opportunity to hear the parties’ conflicting claims and had carefully weighed their respective sets of evidence. Where the factual findings of both the MeTC and RTC coincide, we generally accord respect to such consistency especially when it is shown that these findings and conclusions are ably supported by the evidence.
Article 1159 of the Civil Code expressly provides:
“Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”
AMA insists that there was no written contract between the parties, other than the purchase orders issued. It must be remembered, however, that not all contracts are written. Contracts need not be in writing in order to be valid. Contracts are obligatory in whatever form they may have been entered into provided all essential requisites for their validity are present.[9] A contract is defined as a meeting of minds between two persons whereby one binds himself with respect to the other, to give something or to render some service.[10]
The question of whether or not AMA’s refusal to pay the remaining balance in the amount of P 251,315.50 to Villa Gareza is justified under the parties’ existing contract had been traversed by the court a quo. While it is the contention by petitioner AMA that there was “no delivery” of the purchased signages because it did not accept the said signages due to Villa Gareza’s failure to issue the necessary documents such as the letter of coordination, letter of turnover and completion report, which were allegedly necessary for proper payment, the records of the case, however, are bereft of any evidence, testimonial or documentary, that will prove that AMA informed Villa Gareza of the said documentary requirements. AMA, as matter of fact, did not present and submit any documentary evidence before the trial court. Villa Gareza, on the other hand, through its documentary and testimonial evidence, was able to establish that AMA engaged its services for the fabrication and installation of panaflex signages in the latter’s three (3) school branches as well as the general cleaning of its Makati branch. Villa Gareza was able to prove that indeed after the payment by AMA of fifty percent (50%) downpayment, it immediately delivered and installed the subject signages in the four (4) school branches, but the remaining balance was left unsatisfied despite the demands made.
In the absence of any record or other credible evidence to otherwise prove the alleged failure of Villa Gareza’s non-fulfilment of its obligations under the contract, as claimed by AMA, we cannot reverse the findings of the MeTC and RTC below, which are fully supported by and deducible from, the evidence on record. AMA failed to present any evidence to justify its refusal to pay Villa Gareza for the contracted works that had been performed. There can therefore be no reason to deviate from the assailed rulings.
In civil cases, the burden of proof is on the plaintiff to establish his case by a preponderance of evidence.[11] In affirmative averments the onus probandi falls on pleader’s shoulder.[12] In the case under review, Villa Gareza was able to prove by clear, convincing and preponderant evidence its claim that AMA has an outstanding money obligation that needs to be satisfied. AMA, for its part, failed to credibly dispute the foregoing claim.
With respect, however, to the twelve percent (12%) rate of interest on AMA’s monetary obligation of P 251,351.50 imposed by the MeTC, and which was sustained by the court a quo, we take note of Resolution dated May 16, 2013 issued by the Monetary Board, stating that in the absence of express stipulation between the parties, the rate of interest in loan or forbearance of any money, goods or credits and the rate allowed in judgments shall be 6% per annum. Said Resolution is embodied in Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013, which took effect on July 1, 2013. Hence, the 12% annual interest imposed by the MeTC above shall apply only up to June 30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest shall be 6% per annum until fully paid. The revised interest rate was applied in the recent cases of Nacar v. Gallery Frames, Inc.,[13] Planters Development Bank v. Lopez[14] and Raymundo v. Galen Realty and Mining Corporation,[15] which modified the guidelines[16] in the landmark case of Eastern Shipping Lines v. Court of Appeals.[17]
Hence, AMA shall be liable to pay Villa Gareza the principal amount of P 251,315.50 with 12% per annum interest from the filing of the complaint on July 24, 2002 until June 30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest shall be 6% per annum until fully paid. A rate of 6% interest shall further be imposed from the finality of judgment until satisfaction thereof.
WHEREFORE, the instant petition is DENIED DUE COURSE. The court a quo’s decision and order are AFFIRMED with MODIFICATION as to interest rate. Petitioner AMA Computer College shall pay respondent Villa Gareza Outdoor Advertising the amount of Two Hundred Fifty One Thousand Three Hundred Fifty One and 50/100 (P 251,351.50) with legal interest of twelve percent (12%) per annum computed from judicial demand until June 30, 2013, and six percent (6%) per annum from July 1, 2013, and another six percent (6%) per annum from the time of the finality of this Decision until full satisfaction.
IT IS SO ORDERED.
Reyes, Jr., P.J., (Chairperson) and Gaerlan, JJ., concur.
[1] Written by Presiding Judge Esteban A. Tacla, Jr. of Branch 208, Regional Trial Court of Mandaluyong City, on September 20, 2012 in Civil Case No. MC10-899-a; Rollo, pp. 17-20.
[2] Rollo, pp. 21-22.
[3] Ibid, p. 20.
[4] Rollo, p. 22.
[5] Ibid, p. 23-25.
[6] Rollo, pp. 26-30.
[7] Rollo, pp. 57-58.
[8] Ibid, pp. 59-63.
[9] Article 1356 of the Civil Code; Tan v. Lim, G.R. No. G.R. No. 128004, September 25, 1998, 296 SCRA 455.
[10] Article 1305 of the Civil Code.
[11] Section 1, Rule 133 of the Revised Rules of Court.
SECTION 1. Preponderance of evidence, how determined.– In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. 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 may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.
[12] Hino v. Court of Appeals, G.R. No. 126570, August 18, 2000, 338 SCRA 355.
[13] G.R. No. 189871, August 13, 2013.
[14] G.R. No. 186332, October 23, 2013.
[15] G.R. No. 191594, October 16, 2013.
[16] “I. When an obligation, regardless of its source, i.e., law, contracts, quasi- contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.
[17] G.R. No. 97412, July 12, 1994, 234 SCRA 78.