G.R. No. L-19819. October 26, 1977
WILLIAM UY, PLAINTIFF-APPELLEE, VS. BARTOLOME PUZON, SUBSTITUTED BY FRANCO PUZON, DEFENDANT-APPELLANT.
CONCEPCION JR., J.:
Appeal from the decision of the Court of First Instance of
Manila, dissolving the “U.P. Construction Company” and ordering the
defendant Bartolome Puzon to pay the plaintiff the amounts of: (1) P115,102.13,
with legal interest thereon from the date of the filing of the complaint until
fully paid; (2) P200,000.00, as plaintiff’s share in the unrealized profits of
the “U.P. Construction Company” and (3) P5,000.00, as and for
attorney’s fees.
It is of record that the defendant Bartolome Puzon had a contract
with the Republic of the Philippines
for the construction of the Ganyangan-Bato Section of the Pagadian-Zamboanga City Road, province of Zamboanga del Sur[1] and of five (5) bridges in the Malangas-Ganyangan Road.[2] Finding difficulty in accomplishing both projects,
Bartolome Puzon sought the financial assistance of the plaintiff, William
Uy. As an inducement, Puzon proposed the
creation of a partnership between them which would be the sub-contractor of
the projects and the profits to be divided equally between them. William Uy inspected the projects in question
and, expecting to derive considerable profits therefrom, agreed to the
proposition, thus resulting in the formation of the “U. P. Construction
Company”[3] which was subsequently engaged as
sub-contractor of the construction projects.[4]
The partners agreed that
the capital of the partnership would be P100,000.00 of which each partner shall
contribute the amount of P50,000.00 in cash.[5]
But, as heretofore stated, Puzon was short of cash and he promised to contribute
his share in the partnership capital as soon as his application for a loan with
the Philippine National Bank in the amount of P150,000.00 shall have
been approved. However, before his loan
application could be acted upon, he had to clear his collaterals of its
encumbrances first. For this purpose, on
October 24, 1956, William Uy
gave Bartolome Puzon the amount of P10,000.00 as advance contribution of his share in the partnership to be
organized between them under the firm name U.P. CONSTRUCTION COMPANY
which amount mentioned above will be used by Puzon to pay his obligations with
the Philippine National Bank to effect the release of his mortgages with the
said Bank.[6]
On October 29, 1956, William
Uy again gave Puzon the amount of P30,000.00 as his partial contribution to the
proposed partnership and which the said Puzon was to use in payment of his obligation to the Rehabilitation
Finance Corporation.[7]
Puzon promised William Uy that the amount
of P150,000.00 would be given to the partnership to be applied thusly: P40,000.00, as reimbursement of the capital
contribution of William Uy which the said Uy had advanced to clear the title of
Puzon’s property; P50,000.00, as Puzon’s contribution to the partnership; and
the balance of P60,000.00 as Puzon’s personal loan to the partnership.[8]
Although the partnership agreement was signed by[9]
the parties on January 18, 1957,
work on the projects was started by the partnership on October 1, 1956 in view of the insistence of the
Bureau of Public Highways to complete
the project right away. [10] Since Puzon was busy with his other
projects, William Uy was entrusted with the management of the projects and
whatever expense the latter might incur, would be considered as part of his
contribution.[11] At the end of December, 1957, William Uy had
contributed to the partnership the amount of P115,453.39, including his
capital.[12]
The loan of Puzon was approved by the Philippine National Bank in
November, 1956 and he gave to William Uy the amount of P60,000.00. Of this amount, P40,000.00 was for the
reimbursement of Uy’s contribution to the partnership which was used to clear
the title to Puzon’s property, and the P20,000.00 as Puzon’s contribution to
the partnership capital.[13]
To guarantee the repayment of the above-mentioned loan, Bartolome
Puzon, without the knowledge and consent of William Uy,[14]
assigned to the Philippine National Bank all the payments to be received on
account of the contracts with the Bureau of Public Highways for the
construction of the aforementioned projects.[15]
By virtue of said assignment,
the Bureau of Public Highways paid the money due on the partial accomplishments
on the government projects in question to the Philippine National Bank which,
in turn, applied portions of it in payment of Puzon’s loan. Of the amount of P1,047,181.07, released by
the Bureau of Public Highways in payment of the partial work completed by the
partnership on the projects, the amount of P332,539.60 was applied in payment of Puzon’s loan and only the amount of
P27,820.80 was deposited in the partnership funds,[16] which, for all practical purposes,
was also under Puzon’s account since Puzon was the custodian of the common
funds.
As time passed and the financial demands of the projects
increased, William Uy, who supervised the said projects, found difficulty in
obtaining the necessary funds with which to pursue the construction
projects. William Uy correspondingly
called on Bartolome Puzon to comply with his obligations under the terms of
their partnership agreement and to place, at least, his capital contribution at
the disposal of the partnership.
Despite several promises, Puzon, however, failed to do so.[17]
Realizing that his verbal demands were to no avail, William Uy consequently
wrote Bartolome Puzon formal letters of
demand,[18] to which Puzon replied that he is
unable to put in additional capital to
continue with the projects.[19]
Failing to reach an agreement with William Uy, Bartolome Puzon,
as prime contractor of the construction projects, wrote the sub-contractor,
U.P. Construction Company, on November 20, 1957, advising the partnership, of which he is also a partner, that unless they
presented an immediate solution and capacity to prosecute the work effectively,
he would be constrained to consider the sub-contract terminated and,
thereafter, to assume all responsibilities in the construction of the projects
in accordance with his original contract with the Bureau of Public High ways.[20] On November 27, 1957, Bartolome Puzon again wrote the U.P.
Construction Company finally terminating their sub-contract agreement as of December
1, 1957.[21]
Thereafter, William Uy was not allowed to hold office in the U.P.
Construction Company and his authority to deal with the Bureau of Public
Highways in behalf of the partnership was revoked by Bartolome Puzon who
constinued with the construction projects alone.[22]
On May 20, 1958,
William Uy, claiming that Bartolome Puzon had violated the terms of their
partnership agreement, instituted an action in court, seeking, inter alia,
the dissolution of the partnership and payment of damages.
Answering, Bartolome Puzon denied that he violated the terms of
their agreement claiming that it was the plaintiff, William Uy, who violated
the terms thereof. He, likewise, prayed
for the dissolution of the partnership and for the payment by the plaintiff of
his share in the losses suffered by the partnership.
After appropriate proceedings, the trial court found that the
defendant, contrary to the terms of their partnership agreement, failed to
contribute his share in the capital of the partnership; applied partnership
funds to his personal use; ousted the plaintiff from the management of the firm
and caused the failure of the partnership to realize the expected profits of at
least P400,000.00. As a consequence, the
trial court dismissed the defendant’s counterclaim and ordered the dissolution
of the partnership. The trial court
further ordered the defendant to pay the plaintiff the sum of P320,103.13.
Hence, the instant appeal by the defendant Bartolome Puzon. During the pendency of the appeal before this
Court, the said Bartolome Puzon died, and was substituted by Franco Puzon.
The appellant makes in
his brief nineteen (19) assignments of errors, involving questions of fact,
which relates to the following points:
(1) That the appellant is not guilty of breach of contract; and
(2) That the amounts of money the appellant has been ordered to
pay the appellee is not supported by the evidence and the law.
After going over the record, we find no reason for rejecting the
findings of fact below, justifying the reversal of the decision appealed from.
The findings of the trial court that the appellant failed to
contribute his share in the capital of the partnership is clearly
incontrovertible. The record shows that
after the appellant’s loan in the amount of P150,000.00 was approved by the
Philippines National Bank in November, 1955, he gave the amount of P60,000.00
to the appellee who was then managing the construction projects. Of this amount, P40,000.00 was to be applied
as reimbursement of the appellee’s contribution to the partnership which was
used to clear the title to the appellant’s property, and the balance of P20,000.00, as Puzon’s contribution to
the partnership.[23] Thereafter, the appellant failed to make any
further contributions to the partnership funds as shown in his letters to the
appellee wherein he confessed his inability to put in additional capital to
continue with the projects.[24]
Parenthetically, the claim of the appellant that the appellee is
equally guilty of not contributing his share in the partnership capital
inasmuch as the amount of P40,000.00, allegedly given to him in October, 1956
as partial contribution of the appellee is merely a personal loan of the appellant
which he had paid to the appellee, is plainly untenable. The terms of the receipts signed by the
appellant are clear and unequivocal that the sums of money given by the appellee
are appellee’s partial contributions to the partnership capital. Thus, in the receipt for P10,000.00 dated October
24, 1956,[25] the appellant stated:
“Received from Mr. William Uy the sum of TEN THOUSAND PESOS
(P10,000.00) in Check No. SC 423285 Equitable Banking Corporation, dated
October 24, 1956, as advance contribution of the share of said William Uy in the partnership to be organized between us under the firm name U.P. CONSTRUCTION COMPANY which amount mentioned above will be used
by the undersigned to pay his obligations with the Philippine National
Bank to effect the release of his mortgages with the said bank.”
(Underscoring ours)
In the receipt for the amount of
P30,000.00 dated October 29, 1956,[26] the appellant also said:
“Received from William Uy the sum of THIRTY THOUSAND PESOS (P30,000.00) in Check No. SC423287, of
the Equitable Banking Corporation, as partial contribution of the share of the
said William Uy to the U.P. CONSTRUCTION COMPANY for which the undersigned
will use the said amount in payment of his obligation to the Rehabilitation
Finance Corporation.” (Underscoring ours)
The findings of the trial court that the appellant misapplied
partnership funds is, likewise, sustained by competent evidence. It is of record
that the appellant assigned to the Philippine National Bank all the
payments to be received on account of
the contracts with the Bureau of Public Highways for the construction of the
aforementioned projects to guarantee the repayment of the appellant’s personal
loan with the said bank.[27]
By virtue of the said assignment, the Bureau of Public Highways paid the money
due on the partial accomplishments on the construction projects in question to
the Philippine National Bank who, in turn,
applied portions of it in payment of the appellant’s loan.[28]
The appellant claims, however, that the said assignment was made
with the consent of the appellee and that the assignment did not prejudice the
partnership as it was reimbursed by the appellant.
But, the appellee categorically stated that the assignment to the
Philippine National Bank was made without his prior knowledge and consent and
that when he learned of said assignment, he called the attention of the
appellant who assured him that the assignment was only temporary as he would
transfer the loan to the Rehabilitation Finance Corporation within three (3) months time.[29]
The question of whom to believe being a matter largely dependent
on the trier’s discretion, the findings of the trial court, who had the better
opportunity to examine and appraise the factual issue, certainly deserve
respect.
That the assignment to the Philippine National Bank is
prejudicial to the partnership cannot be denied. The record shows that during the period from
March, 1957 to September, 1959, the appellant Bartolome Puzon received from the
Bureau of Public Highways, in payment of the work accomplished on the
construction projects, the amount of P1,047,181.01, which amount rightfully and
legally belongs to the partnership by virtue of the subcontract agreements
between the appellant and the U.P. Construction Company. In view of the assignment made by Puzon to
the Philippine National Bank, the latter withheld and applied the amount of
P332,539.60 in payment of the appellant’s personal loan with the said
bank. The balance was deposited in
Puzon’s current account and only the amount of P27,820.80 was deposited in the
current account of the partnership.[30]
For sure, if the appellant gave to the partnership all that were earned and due
it under the sub-contract agreements, the money would have been used as a safe
reserve for the discharge of all obligations of the firm and the partnership
would have been able to successfully and profitably prosecute the projects it
subcontracted.
When did the appellant make the reimbursement claimed by him?
For the same period, the appellant actually disbursed for the
partnership, in connection with the construction projects, the amount of
P952,839.77.[31]
Since the appellant received from the
Bureau of Public Highways the sum of P1,047,181.01, the appellant has a deficit
balance of P94,342.24. The appellant,
therefore, did not make complete restitution.
The findings of the trial court that the appellee has been ousted
from the management of the partnership is also based upon persuasive
evidence. The appellee testified that
after he had demanded from the appellant payment of the latter’s contribution
to the partnership capital, the said appellant did not allow him to hold office
in the U.P. Construction Company and his authority to deal with the Bureau of
Public Highways was revoked by the appellant.[32]
As the record stands, We cannot say, therefore, that the decision
of the trial court is not sustained by the evidence of record as to warrant
its reversal.
Since the defendant-appellant was at fault, the trial court
properly ordered him to reimburse the plaintiff-appellee whatever amount the
latter had invested in or spent for the partnership on account of the
construction projects.
How much did the appellee spend in the construction projects in
question?
It appears that although the partnership agreement stated that
the capital of the partnership is P100,000.00 of which each partner shall
contribute to the partnership the
amount of P50,000.00 in cash,[33] the partners of the U.P. Construction
Company did not contribute their agreed share in the capitalization of the
enterprise in lump sums of P50,000.00 each. Aside from the initial amount of P40,000.00
put up by the appellee in October, 1956,[34] the partners’ investments took the form of
cash advances covering expenses of the construction projects as they were incurred. Since the determination of the amount of the
disbursements which each of the partners had made for the construction
projects required an examination of various books of account, the trial court
appointed two commissioners, designated by the parties, “to examine the
books of account of the defendant regarding the U.P. Construction Company and
his personal account with particular reference to the Public Works contract for
the construction of the Ganyangan-Bato Section, Pagadian- Zamboanga City Road
and five (5) Bridges in Malangas-Ganyangan Road, including the payments
received by defendant from the Bureau of Public Highways by virtue of the two
projects above mentioned, the disbursements or disposition made by defendant
of the portion thereof released to him by the Philippine National Bank and in
whose account these funds are deposited.”[35]
In due time, the commissioners so appointed,[36]
submitted their report[37]
wherein they indicated the items wherein they are in agreement, as well as
their points of disagreement.
In the commissioners’ report, the appellee’s advances are listed
under Credits; the money received from the firm, under Debits; and the
resulting monthly investment standings of the partners, under Balances. The commissioners are agreed that at the end
of December, 1957, the appellee had a
balance of P8,242.39.[38] It
is in their respective adjustments of the capital account of the appellee that
the commissioners had disagreed.
Mr. Ablaza, designated by the appellant, would want to charge the
appellee with the sum of P24,239.48, representing the checks issued by the
appellant,[39]
and encashed by the appellee or his
brother, Uy Han so that the appellee would owe the partnership the amount of
P15,997.09.
Mr. Tayag, designated by the appellee, upon the other hand, would
credit the appellee the following additional amounts:
(1) P7,497.80 – items
omitted from the books of the partnership but recognized and charged to
Miscellaneous Expenses by Mr. Ablaza;
(2) P65,103.77 –
payrolls paid by the appellee in the amount of P128,103.77 less payroll
remittances from the appellant in the amount of P63,000.00; and
(3) P26,027.04 – other expenses incurred by the appellee at the
construction site.
With respect to the amount of P24,239.48, claimed by the appellant,
we are hereunder adopting the findings of the trial court which we find to be
in accord with the evidence:
“To enhance defendant’s theory that he should be credited with
P24,239.48, he presented checks allegedly given to plaintiff and the latter’s
brother, Uy Han, marked as Exhibits 2
to 11. However, defendant admitted that
said checks were not entered nor recorded in their books of account, as
expenses for and in behalf of the partnership or its affairs. On the other hand, Uy Han testified that some
of the checks he received were exchanged for cash, while others were used in
the purchase of spare parts requisitioned by defendant. This testimony was not refuted to the satisfaction
of the Court, considering that Han’s explanation thereof is the more plausible,
because if they were employed in the prosecution of the partnership projects,
the corresponding disbursements would have certainly been recorded in its
books, which is not the case. Taking
into account that defendant is the custodian of the books of account, his
failure to so enter therein the alleged disbursements, accentuates the falsity
of his claim on this point.” [40]
Besides, as further noted by the trial court, the report of
Commissioner Ablaza is unreliable in view of his proclivity to favor the
appellant and because of the inaccurate
accounting procedure adopted by him in auditing the books of account of the
partnership, unlike Mr. Tayag’s report which inspires faith and credence.[41]
As explained by Mr. Tayag, the amount of P7,497.80 represented
expenses paid by the appellee out of his personal funds which had not been
entered in the books of the partnership but which had been recognized and
conceded to by the auditor designated
by the appellant who included the said amount under “Miscellaneous
Expenses.”[42]
The explanation of Mr. Tayag on the inclusion of the amount of
P65,103.77 is likewise clear and convincing.[43]
As for the sum of P26,027.04; the same represents the expenses
which the appellee paid in connection with the projects and not entered in the
books of the partnership since all
vouchers and receipts were sent to the Manila office which were under the control of the
appellant. However, a list of these
expenses are incorporated in Exhibits ZZ, ZZ-1 to ZZ-4.
In resume, the appellee’s
credit balance would be as follows:
Undisputed balance as of Dec.
1957………………………………………………………………. P 8,242.30
Add: Items omitted from the
books but recognized
and
charged to
Miscellaneous
Expenses by Mr. Ablaza………………………….. 7,497.80
Add: Payrolls paid by the
Appellee…………………………… P128,103.77
Less: Payroll,
remittances
Received………………………….. 63,000.00 – – 65,103.77
Add: Other
expenses incurred
at the site (Exhs. ZZ,
ZZ-1
to ZZ-4)……………………………………….. 26,027.04
TOTAL. . . . .
P106,871.00
At the trial, the appellee presented a claim for the amounts of
P3,917.39 and P4,665.00 which he also advanced for the construction projects
but which were not included in the Commissioner’s Report.[44]
Appellee’s total investments in the partnership would, therefore,
be:
Appellee’s total credits…………………………………….. P106,871.00
Add: Unrecorded balances for
the month of Dec. 1957
(Exhs. KKK, KKK-1 to
KKK-19, KKK- 22)………………………………….. 3,917.39
Add:
Payments to Muñoz, as
sub-contractor of five (5)
Bridges (p. 264, tsn;
Exhs . KKK-20,
KKK-21)…………………………. 4,665.00
Total Investments………………………… P115,453.39
Regarding the award of P200,000.00 as his share in the unrealized
profits of the partnership, the appellant contends that the findings of the
trial court that the amount of P400,000.00 as reasonable profits of the
partnership venture is without any basis and is not supported by the evidence. The appellant maintains that the lower court,
in making its determination, did not take into consideration the great risks
involved in business operations involving as it does the completion of the
projects within a definite period of
time, in the face of adverse and often unpredictable circumstances, as well as the fact that the appellee, who was in charge of the projects in the
field, contributed in a large measure to the failure of the partnership to
realize such profits by his field management.
This argument must be overruled in the light of the law and
evidence on the matter. Under Article
2200 of the Civil Code, indemnification for damages shall comprehend not only
the value of the loss suffered, but also that of the profits which the obligee
failed to obtain. In other words lucrum cessans is also a basis for indemnification.
Has the appellee failed
to make profits because of appellant’s breach of contract?
There is no doubt that the contracting business is a profitable
one and that the U.P. Construction Company derived some profits from its
sub-contracts in the construction of the road and bridges projects despite its
deficient working capital and the juggling of its funds by the appellant.
Contrary to the appellant’s claim, the partnership showed some
profits daring the period from July 2, 1956 to December 31, 1957. If the Profit and Loss Statement[45]
showed a net loss of P134,019.43, this was primarily due to the confusing
accounting method employed by the auditor who intermixed the cash and accrual
method of accounting and the erroneous inclusion of certain items, like
personal expenses of the appellant and alleged extraordinary losses due to an
accidental plane crash, in the operating expenses of the partnership. Corrected, the Profit and Loss Statement
would indicate a net profit of P41,611.28.
For the period from January 1, 1958 to September 30, 1959, the
partnership admittedly made a net profit of P52,943.89.[46]
Besides, as We have heretofore pointed out, the appellant
received from the Bureau of Public Highways, in payment of the construction
projects in question, the amount of P1,047,181.01[47] and disbursed the amount of P952,839.77,[48] leaving an unaccounted balance of
P94,342.24. Obviously, this amount is
also part of the profits of the partnership.
During the trial of this case, it was discovered that the
appellant had money and credits receivable from the projects in question, in
the custody of the Bureau of Public Highways, in the amount of P128,669.75, representing
the 10% retention of said projects.[49] After the trial of this case, it was shown
that the total retentions deducted from the appellant amounted to P145,358.00.[50] Surely, these retained amounts also form
part of the profits of the partnership.
Had the appellant
not been remiss in his obligations as partner and as prime contractor of the
construction projects in question as he was bound to perform pursuant to the
partnership and sub-contract agreements, and considering the fact that the
total contract amount of these two projects is P2,327,335.76, it is reasonable
to expect that the partnership would have earned much more than the P334,255.61
We have hereinabove indicated. The
award, therefore, made by the trial court of the amount of P200,000.00, as
compensatory damages, is not speculative, but
based on reasonable estimate.
WHEREFORE, finding no error in the decision appealed from,
the said decision is hereby affirmed with costs against the appellant, it being
understood that the liability mentioned herein shall be borne by the estate of
the deceased Bartolome Puzon, represented in this instance by the administrator
thereof, Franco Puzon.
SO ORDERED.
Fernando, (Chairman), Barredo, Antonio, and Santos, JJ., concur.
Aquino, J., in the result.
[1]
known as Project No. 51-7-5-1, in the amount of P1,976,103.90, which was later
on increased to P2,037,880.12 (Exhibit A).
[2]
known as Project Nos. 51-7-4 (Spur 1) and 51-7-5-2, in the amount of
P258,229.64, which was later on increased to P289,455.64 (Exhibit B).
[3]
Exhibit EEE.
[4]
Exhibits FFF, GGG.
[5]
paragraph 6, Exhibit EEE.
[6]
Exhibit HHH.
[7]
Exhibit HHH-1.
[8]
pp. 248, 313, t.s.n.
[9]
Exhibit EEE.
[10]
p. 230, t.s.n.; see also Exhibits FFF, GGG.
[11]
pp. 230, 241, 249, 299, t.s.n.
[12]
Exhibit CCC; pp. 263, 264, t.s.n.
[13]
p. 249, t.s.n.
[14]
p. 288, t.s.n.
[15]
Exhibits 59 and 60.
[16]
Exhibit AAA
[17]
pp. 237, 238, t.s.n.
[18]
Exhibits III-1, III-3, III-5, III-8.
[19]
Exhibits III, III-4, III- 6.
[20]
Exhibit III-2.
[21]
Exhibit 111-7.
[22]
p. 276, t.s.n.; Exhibit LLL.
[23]
p. 249, t.s.n.
[24]
Exhibits III, III-4, III- 6.
In his letter dated November 25, 1957, the appellant said:
“In all
our previous conferences and discussions, cordial and sometimes high pitched,
to find a solution to our continuous losses, I have confessed to you my
inability to put additional capital to continue on with the project. This has been brought about by the change of
policy by the RFC in connection with my application filed with that Office, on
which is premised the assignment of the contract on my loan from the PNB and
which is with your full knowledge and approval.
******* ****** *****
“Since we are
depending on outside capital to help us in the prosecution of the projects,
since under the present circumstances and conditions, it is very hard to bring
about the necessary outside capital,
and because, whatever financing I may be able to place is borrowed and temporary, which you can not conform,
then I wish to advise you that, I can no longer continue to go on with our
partnership’ for the reason that I can not, place additional capital beyond
what I have placed including my share of the obligation. ” (Exhibit III-
4)
The appellant’s
position “as no longer able to put additional capital”, was
reiterated in his letter dated November 27, 1957. (See Exhibit III-6).
[25]
Exhibit HHH.
[26]
Exhibit HHH-1.
[27]
Exhibits 59 and 60.
[28]
See Exhibit AAA.
[29]
William Uy’s testimony reads, as follows:
“Q When did you first know that the two projects
of Mr. Puzon at Zamboanga del Sur which was the subject matter of the subcontract
agreement were encumbered by an assignment made by Mr. Puzon in favor of the
Philippine National Bank?
“A I think in January or February after my
returned from the projects. That was the
time he told me about the assignment. I
have no knowledge of the assignment.” (p. 288, tsn)
“Q When you signed the partnership and subcontract
agreements Exhibits EE and FF and also Exhibit GGG, you already knew that the
projects were encumbered by an assignment in favor of the Philippine National
Bank?
“A Yes, sir, but he informed me that it was only a formality and that he will
make the necessary arrangement because I objected to it on that assignment.
“Q So that in spite of the fact that you knew
that the two projects subject matter of these contracts Exhibits FFF and GGG
were already assigned by Mr. Puzon to the Philippine National Bank you still signed the
sub-contracts Exhibits FFF and GGG?
“A I
signed because of his promise to cancel that assignment and transfer it to the
RFC within three months time and continue in the meantime that P50,000.00 and
if he can not maintain that, he will get that from the outside source.”
(p. 290, tsn).
[30]
Exhibit AAA.
[31]
Puzon’s advances of P991,054.78 less the amounts of P16,265.01, which were
incurred for the personal expenses of Puzon, and P21,950.00, representing
questionable disbursements of which P20,000.00 was allegedly lost in an
airplane crash, equals P952,839.77 (See Exhibit BBB).
[32]
The appellee’s testimony on this point, reads:
“Q After you wrote Mr. Puzon Exhibits III-1 to
III- 9, what happened?
“A After I have written these letters, I was
being driven out of the company and then I was not allowed to hold office in
that office we were supposed to be. Then
he wrote a letter and informing the Bureau of Public Highways that I am no
longer connected in that projects and he issued a letter of revocation of my
power. So my hands are tied.
“Q
Showing to you this document which is a revocation of power of Mr. Puzon, what
reference has this with the revocation referred to by you issued by Mr. Puzon?
“A This is the very letter of revocation of
power given to me.
“Q Whose signature is this which reads
‘Bartolome Puzon’?
“A That is the signature of Mr. Puzon.
“Q Below the signature, there appears a
signature which reads ‘Zenaida
O. Beltran’, whose signature is that?
“A That is the signature of one of the clerks of
the company.
“ATTY. SALVADOR:
For purposes of identification, we
request that this revocation of power of Mr. Puzon be marked as Exhibit LLL,
for the plaintiff.
“COURT:
Let it be so marked.” (pp.
276-277, tsn).
[33]
par. 6, Exhibit EEE.
[34]
Exhibits HHH, HHH-1.
[35]
p. 53, Record on Appeal.
[36]
Jesus B. Tayag, for the plaintiff, and Angel
C. Ablaza, for the defendant.
[37]
p. 58, Record on Appeal.
[38]
pp. 61, 64, Record on Appeal.
[39]
Exhibits 2 to 11, inclusive.
[40]
pp. 241-242, Record on Appeal.
[41]
pp. 246-247, Record on Appeal.
[42]
pp. 163-165, t.s.n.
[43]
Mr. Tayag’s testimony on this point reads:
“Q We notice Mr. Tayag under the capital account
in your report, Commissioner’s Report, you made adjustments in the form of
payrolls paid in 1956 to 1957 in the amount of P128,103.77, would you please
explain why you made such adjustment?
“A I believe, I have already explained in my
comment. When I was examining the books
of the U.P. Construction Company, I found out that the amount charge to
salaries and wages were remittances by telegraphic transfers to the Zamboanga
Office. In proper accounting, remittances should not have been entered as
salaries immediately because you don’t know what disposition would be made
finally of the amount remitted, until the amounts are actually paid and covered
by payrolls in Zamboanga Office, nothing should be recorded as salaries
and wage. Instead, the remittances
should have been charged to the incharge or manager of the project or payroll
clerk as account receivable. When the
particular payrolls are reported back to Manila, that is the time you enter the
actual amount paid. Because while the
remittances in round figures say P10,000.00, the actual payroll would not be
exactly that amount. At the time of the
receipt of the payrolls, that is the only time the adjustment of salaries and
wages should be made. So I asked the
personnel of the U.P. Construction Company whether there were payrolls in the
files. I was told that there were
payrolls but they would not release to me without permission from Mr. Puzon or
his attorney. So, I contacted Mr. Uy by telephone whether there were payrolls
or papers in the project site. He told
me that there were and that they were sent to Manila. As a proof, he brought to
me a list in detail containing the names of the employees by the month and the
amount received by them. When I returned
back to the office of Mr. Puzon, I inquired again whether the payrolls will be
lent to me. There was much delay and later on I understood that Mrs. Barrera
telephoned the attorney of Mr. Puzon, who agreed to release the payrolls to
me. I checked over the list of Mr. Uy with the payrolls. I found out that the
amount corresponding to each employee in his list tally with those in the
payrolls. But the payrolls most of them
were not in total. So there was no way
of knowing the total amount in the payrolls.
I believe there is reasonable proof that those were the payrolls that
were paid by Mr. Uy. That is the reason
why I included in my Exhibit A the amount of P128,103.77.
“Q Do you have the list of the persons to whom
payments were made by Mr. Uy which
you said was given to you prior to your seeing the payrolls in the U.P.
Construction Company’s office and confronting it with the said payrolls which
you found that they tally?
“A Yes, sir, I have the list given to me by Mr.
Uy which shows here ‘Summary payrolls for the month of October 1956 to January
1957’ already signed. (Witness handing to counsel for the plaintiff the said
list).
“ATTY. SALVADOR:
Consisting of
nine pages, which for purposes of identification, we request that the same be
marked as Exhibits YY, YY-1 to YY-8.
“COURT:
Let them be so marked.
“ATTY. SALVADOR:
“Q Now, in your adjustment Mr. Tayag under the
capital account of Mr. Uy, Exhibit A-Tayag, there is a deduction from said
amount of P128,103.77, representing payrolls paid by, him in the amount of
P63,000.00, what does this amount represent?
“A As I have said the amount charged to salaries
and wages in the books of Mr.
Puzon were the remittances to Zamboanga Office intended for the payment of the
laborers. The amount of P63,000.00 as mentioned
by me in schedule 2, were the same remittances which I deducted from the total
of these payrolls. I deducted this amount of P63,000.00 from the P128,000.00
plus resulting only in the amount of P65,103.77 which is the net credit carried
to the account of Mr. Uy.” (pp. 165-169, tsn)
[44]
pp. 263-264, tsn; See also Exhibits
KKK, KKK-1 to KKK-22.
[45]
p. 68, Record on Appeal.
[46]
p. 70, Record on Appeal.
[47]
Exhibit AAA.
[48]
See footnote 31.
[49]
p. 135, Record on Appeal.
[50]
pp. 267-268, Record on Appeal.