BP Oil and Chemicals International Philippines, Inc. Vs. Total Distribution & Logistic Systems, Inc.
G.R. No. 214406
February 6, 2017
FACTS:
A Complaint for Sum of Money was filed by petitioner BP Oil against respondent Total Distribution & Logistic Systems, Inc. (TDLSI) on April 15, 2002, seeking to recover the sum of P36,440,351.79 representing the total value of the moneys, stock and accounts receivables that TDLSI has allegedly refused to return to BP Oil.
According to the allegations in the complaint, the defendant entered into an Agency Agreement (the Agreement) with BP Singapore on September 30, 1997, whereby it was given the right to act as the exclusive agent of the latter for the sales and distribution of its industrial lubricants in the Philippines. The agency was for a period of five years from 1997 to 2002. In return, the defendant was supposed to meet the target sales volume set by BP Singapore for each year of the Agreement. As agreed in the Supplemental Agreement they executed on January 6, 1998, the defendant was supposed to deposit the proceeds of the sales it made to a depositary account that the defendant will open for the purpose. On April 27, 1998, BP Singapore assigned its rights under the Agreement to the plaintiff effective March ls 1998.
When the defendant did not meet its target sales volume for the first year of the Agreement, the plaintiff informed the defendant that it was going to appoint other distributors to sell the BP’s industrial lubricant products in the Philippines. The defendant did not object to the plan of the plaintiff but asked for P10,000,000.00 as compensation for the expenses. The plaintiff did not agree to the demand made by the defendant.
On August 19, 1999, the defendant through its lawyer, wrote the plaintiff a letter where it demanded that it be paid damages in the amount of P40,000,000.00 and announced that it was withholding remittance of the sales until it was paid by the plaintiff. On September 1, 1999, the plaintiff wrote the defendant back to give notice that it was terminating the Agreement unless the defendant rectified the breaches it committed within a period of 30 days. The plaintiff also demanded that the defendant pay the plaintiff its outstanding obligations and return the unsold stock in its possession.
On October 11, 1999, the plaintiff gave the defendant formal notice of [sic] that it was terminating the Agreement after it did not hear from the defendant. The plaintiff would find out that the defendant had filed a request for arbitration with the Philippine Dispute Resolution Center, Inc. (PDRCI).
On October 9, 2000, the plaintiff, through Mr. Lau Hock Lee, sent the defendant another letter to reiterate its demand for the defendant to return the unremitted collections and stocks in its possession.
On April 30, 2001, the defendant, through Mr. Miguel G. de Asis, its Chief Finance Officer, wrote the plaintiff a letter admitting that as of the said date, it had in its possession collections against sales in the amount of P27,261,305.75, receivables in the amount of P8,767,656.26 and stocks valued at P1,155,000.00.
On July 9, 2001, the law firm of Siguion Reyna Montecillo & Ongsiako sent the defendant a formal demand letter for the payment of the total amount of P36,440,351.79 representing the total amount of the collections, receivables and stocks that defendant should have returned to the plaintiff as of May 31, 2001. The amount was based on a summary of account prepared by Ms. Aurora B. Osanna, plaintiffs Business Development Supervisor.
On April 15, 2002, the plaintiff filed the instant complaint for collection against the defendant. The defendant initially filed a Motion to Dismiss the complaint on the ground for [sic] lack of cause of action because of the existence of an arbitration agreement, as well as a previously filed arbitration proceeding between the parties. This Court denied the defendant’s Motion to Dismiss for lack of merit in its Order dated February 21, 2003. The Motion for Reconsideration filed by the defendant was likewise denied by this Court on April 30, 2003. The Defendant went up to the Court of Appeals to question the denial of its Motion to Dismiss via a Petition for Certiorari and Prohibition.
On June 9, 2003, the Defendant filed its Answer Ad Cautelam with Compulsory Counterclaim Ad Cautelam.
In its answer, the defendant alleged that it was appointed as the exclusive agent of the plaintiff to sell BP brand industrial lubricants in the Philippines. The agency was to last for five years from signing of the Agreement, or until September 29, 2001. As the exclusive agent of BP products, the defendant was tasked to promote, market, distribute and sell the BP products supplied the plaintiff.
The defendant further alleged that it did not fail to meet the sales target for Year I. Delays on the part of the plaintiff in shipping the products moved the commencement of the Agreement from January 1997 to August 1997, making the stipulated sales target no longer applicable.
On June 8, 1999, the plaintiff unexpectedly informed the defendant of its intention to assume more control of Philippine operations, including the appointment of a full-time representative in the Philippines and new distributors. No reason was given for this policy change.
Although the defendant pointed out to the plaintiff that the appointment of a new distributor would violate the Agency Agreement, the plaintiff ignored the defendant’s protests and affirmed that it would proceed with taking over control of the distribution in the Philippines of BP products and with appointing additional distributors.
While business proceeded, the defendant’s counsel, Atty. Eugeniano E. Perez III, sent the plaintiff a letter dated August 19, 1999 pointing out, among others, that: a) The plaintiffs plan to take over the lubricant business and appoint other distributors was in breach of the Agency Agreement; b) the defendant incurred losses because of the plaintiffs non-compliance with the Agreement and lack of support; and c) the defendant would be carrying on the business would be withholding any funds to be collected pending compliance with the demand.
Instead of heeding the consequences of its proposed illegal acts, the plaintiffs took steps to take over the distribution of BP Products in the Philippines and to appoint new agents for this purpose. Even before the termination of the Agreement, the plaintiff cut off the supply of BP products to the defendant, and even tried to sell directly to the defendant’s customers, without the defendant’s knowledge. To protect its rights, and pursuant to the arbitration clause under the Agreement, the defendant filed a Request for Arbitration before the Philippine Dispute Resolution Center, Inc. (PDRCI) on 5 October 1999.
By way of affirmative defenses, the defendant argued that: 1.) it has the right to retain in pledge objects subject of the agency until it is indemnified by the plaintiff for the damages it suffered under Article 1914 in relation to Articles 1912 and 1913 of the Civil Code; 2.) the complaint is dismissible on the ground of lack of cause of action for being prematurely filed and/or litis pendencia because the issue in the case is already a sub-issue in the arbitration proceedings; and 3.) the action should be stayed in accordance with Republic Act No. 876.
On March 21, 2004, the Court of Appeals came out with its Decision affirming this Court’s denial of the defendant’s Motion to Dismiss after the defendant filed it Answer Ad Cautelam. The Court of Appeals also denied the defendant’s Motion for Reconsideration on August 16, 2004. The Decision of the Court of Appeals sustaining this Court attained finality with the denial by the Supreme Court on November 10, 2004 of the Petition for Review on Certiorari filed by the defendant as well as its Motion for Reconsideration from the said denial.
In light of the finality of the decision of the Court of Appeals, the defendant lost its right to invoke the pendency of the arbitration proceedings as part of its affirmative defenses. The defendant is therefore left with only one affirmative defense to the complaint of the plaintiff, and this is the right of retention given to an agent under Article 1912, 1913 and 1914 of the Civil Code.
ISSUE:
1. Whether or not the CA committed serious error of law in rendering its decision as well as in denying bp oil’s motion for reconsideration.
2. whether or not the CA seriously erred in not ruling that with or without exhibit “j,” bp oil has met the quantum of proof required by law to prove its claim
HELD :
The Petition for Review on Certiorari under Rule 45 of the Rules of Court dated November 10, 2014 of BP Oil and Chemicals International Philippines, Inc. is GRANTED. Consequently, the Decision dated April 30, 2014 of the Court of Appeals is REVERSED and SET ASIDE and the Decision dated January 21, 2011 of the Regional Trial Court, Branch 148, Makati City is AFFIRMED and REINSTATED, with the MODIFICATION that the interest imposed should be 12% per annum from July 19, 2001 until June 30, 2013 and 6% per annum from July 1, 2013 until fully paid.
This Court’s Decision in Cheesman v. Intermediate Appellate Court distinguished questions of law from questions of fact:
As distinguished from a question of law – which exists “when the doubt or difference arises as to what the law is on a certain state of facts” – “there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts;” or when the “query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to each other and to the whole and the probabilities of the situation.”
Seeking recourse from this court through a petition for review on certiorari under Rule 45 bears significantly on the manner by which this court shall treat findings of fact and evidentiary matters. As a general rule, it becomes improper for this court to consider factual issues: the findings of fact of the trial court, as affirmed on appeal by the Court of Appeals, are conclusive on this court. “The reason behind the rule is that [this] Court is not a trier of facts and it is not its duty to review, evaluate, and weigh the probative value of the evidence adduced before the lower courts.
- When the conclusion is a finding grounded entirely on speculation, surmises or conjectures;
- When the inference made is manifestly mistaken, absurd or impossible;
- Where there is a grave abuse of discretion;
- When the judgment is based on a misapprehension of facts;
- When the findings of fact are conflicting;
- When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;
- The findings, of the Court of Appeals are contrary to those of the trial court;
- When the findings of fact are conclusions without citation of specific evidence on which they are based;
- When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents.
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