NOSTRAM LABORATORIES, INC., PETITIONER, VS. HON. COURT OF APPEALS AND STAR PAPER CORPORATION, RESPONDENTS.

This is an appeal by certiorari from the decision of the
Court of Appeals in CA-G.R. CV No. 21021 reversing the decision of the Regional
Trial Court of Quezon City, Branch 87, in an action of the petitioner, Nostram
Laboratories, Inc., to recover a sum
of money with damages against the private respondent, Star Paper Corporation.

On October 23, 1985, the petitioner ordered and purchased from
the private respondent P11,070.00 worth of Kodaline films, size 24″ x
30″. Petitioner’s presi­dent,
Angel Montenegro, Jr., personally picked up the order from private respondent’s
office but upon opening the box inside his dark room, he discovered that the
Kodaline films were not the correct size that he had ordered. Instead of size 24″ x 30″, the box
contained size 20″ x 30″ Kodaline films.

The next day, Montenegro phoned the private re­spondent and was
able to speak with the saleslady, Natividad Barlin. He informed her that the films she gave him were not size
24″ x 30″ but 20″ x 30″. Ms. Barlin allegedly answered that size 24″ x 30″ was out of
stock. She requested Montenegro to
accept the films and assured him that she would refund the price difference of
P3,320.00. Rejecting that proposition,
Montenegro returned the films on October 25, 1985. According to Montenegro, upon receipt of the box of films, Barlin
opened the box to inspect the films, and thereby exposed them to the
light. Realizing her mistake, Barlin re­turned
the package to him and refused to make any refund.

Petitioner filed in the Regional Trial Court of Quezon City,
Branch 87, an action to recover the pur­chase price of P11,070.00 with
interest, plus P15,000.00 as unrealized profits and attorney’s fees and costs.

In its defense, the private respondent alleged that it was the
petitioner that damaged the films by opening not only the outer box of the
individual films but also the inner plastic wrapper which served as protective
cover for the sensitive and delicate Kodaline films. Private respondent further alleged that Montene­gro was to blame
for failing to inspect the box of films before accepting and paying for them.

The trial court ruled in petitioner’s favor. However, on appeal by the private
respondent, the Court of Appeals reversed the trial court. The appellate court observed that the
petitioner failed to present in evidence the damaged and undersized films which
consti­tuted “real evidence” of the allegedly damaged condition of
the films. Citing Section 3(e), Rule
131 of the Revised Rules of Court which provides that “the presump­tion is
that evidence willfully suppressed would be adverse if produced,” the
appellate court believed the private respondent’s assertion that the petitioner
may have used the films, for, otherwise, it should have produced them at the
trial.

On the other hand, the petitioner contended that it was not
necessary to produce the films to prove that they were damaged, because the
private respondent’s witness, Ms. Barlin, made an admission to that
effect. Pursuant to Section 2, Rule 129
of the Rules of Court, “admissions made by the parties in the pleadings,
or in the course of the trial or other proceedings do not require proof and can
not be contradicted unless previously shown to have been made through palpable
mistake.”

The admission adverted to is found in the follow­ing testimony of
Ms. Barlin:

“Q – Miss Barlin, what size of Kodaline film that was ordered and
purchased by the plaintiff from your company on October 23, 1985?

“A – The size of 24 x 30.

“Q – Showing you this Exhibit A, Miss Barlin, and this is the official
invoice of your corpo­ration, isn’t it?

“A
– Yes sir.

“Q – And the size of the film that was ordered and paid for by the
plaintiff, also with the size of 24 x 30, isn’t it?

“A – Yes, sir.

“Q – And the amount paid by the plaintiff for that particular product
with size 24 x 30 also?

“A – Yes sir.

“Q – and the film that was given by your company was with the size
shorter that what he has or­dered, isn’t it?

“A – Yes, sir.” (p. 7, Rollo.)

Since the private respondent, through its witness, Ms. Barlin,
admitted only that it delivered to the petitioner the shorter film, size
20″ x 30″, but did not admit that she damaged the films by exposing
them to the light, the petitioner had the burden of proving that the films were
indeed damaged and became unusable. Since the petitioner failed to discharge that burden of proof, the Court
of Appeals was justified in assuming that the petitioner did not produce the
films in court because it made use of them.

Nevertheless, the appellate court erred in dismissing the
petitioner’s complaint. The films that
the private respondent delivered to the petitioner were admittedly not the
correct size. The petitioner is
therefore entitled to recover the price difference of P3,320.00.

WHEREFORE, the petition for review is GRANTED. The decision of the Court of Appeals is
modified by ordering the private respondent to pay to the petitioner the price
difference of P3,320.00 between the size 24″ x 30″ films which the
petitioner ordered and the size 20″ x 30″ films which it received
from the private respond­ent, with legal rate of interest from October 23, 1985
until fully paid, plus reasonable attorney’s fees in the sum of P3,000.00 and
the costs.

SO ORDERED.

Cruz, (Chairman), Padilla, and
Bellosillo, JJ., concur.