Facts:

The case involves Alfonso O. Alejandro as the petitioner and the Honorable Court of Appeals, Jose Madulid, Sr., and Efren Madulid as respondents. The events leading to this case began on March 3, 1975, when the private respondents, Jose and Efren Madulid, who operated a business named Grace Park Poultry Supply and Hi-Grade Feeds, offered to supply custom-formulated hog feeds to Alejandro for his piggery farm located in Cabiao, Nueva Ecija. The agreement stipulated a 30-day credit period with an interest rate of 12% per annum. However, by 1976, Alejandro began experiencing significant issues with his hogs, which were diagnosed by a veterinarian as severe nutritional deficiencies, leading to poor litter yield and high mortality rates among the piglets.

In July 1976, Alejandro submitted samples of the feeds to the Bureau of Animal Industry (BAI) for analysis. The results indicated the presence of ground rice hulls and other unauthorized ingredients, which Alejandro attributed ...

Facts:

Parties and Business Relationship

• The private respondents, Jose Madulid, Sr. and his son Efren Madulid, are engaged in the manufacture and sale of hog and poultry feeds under the business names Grace Park Poultry Supply and Hi-Grade Feeds.
• The petitioner, Alfonso O. Alejandro, operates a piggery farm in Cabiao, Nueva Ecija, and entered into a transaction with the respondents.

Agreement and Transaction Details

• On March 3, 1975, the private respondents offered to supply petitioner feed formulations designated for “Brood Sow,” “Hog Starter,” and “Hog Pre-Starter” for exclusive use in his piggery.
• The petitioner acknowledged that the feeds were described as “custom-formulated” and agreed to the delivery on a 30-day credit basis with an interest rate of 12% per annum.

Emergence of Problems and Allegations of Adulteration

• In 1976, petitioner Alejandro reported problems with his hogs, which eventually were diagnosed by his veterinarian as involving poor litter yields, scouring, mortality among suckling piglets, stunting of growth in weanlings and fatteners, and an overall “severe nutritional deficiency.”
• In response, the petitioner submitted samples of the three types of hog feeds (Brood Sow, Hog Starter, and Hog Pre-Starter) for chemical analysis and microscopic examination at the Laboratory Division of the Bureau of Animal Industry (BAI) in July 1976.

Laboratory Findings and the Issue of Feed Adulteration

• On or about August 27, 1976, the petitioner received laboratory reports indicating that the feeds contained unauthorized ingredients.
• The reports showed the presence of ground rice hulls, substitution of rice bran with corn bran, and additional ingredients such as sorghum, sunflower, and soy hulls. These findings led the petitioner to allege that the feeds were adulterated.
• Shocked by the findings, the petitioner held the respondent’s deliveries responsible for the collapse of his piggery business and refused to pay for certain deliveries.

Unpaid Balance and Initiation of Legal Proceedings

• As of August 25, 1976, when the last delivery was made, the petitioner’s unpaid balance totaled P40,815.60.
• Despite repeated demands by the respondents to settle the balance, the petitioner maintained his refusal to pay, prompting respondent Jose Madulid, Sr. to file Civil Case No. C-5071 on October 4, 1976 in the Court of First Instance of Rizal at Caloocan City for the recovery of the said amount, including interest and attorney’s fees.
• Concurrently, the petitioner filed a damage suit against the respondents in the Court of First Instance of Nueva Ecija (Civil Case No. 972) for selling allegedly inferior quality feeds; however, this case was dismissed on grounds of improper venue.

Additional Legal Actions and Counterclaims

• On April 12, 1977, both private respondents filed Civil Case No. C-6263 against the petitioner claiming they suffered reputational harm, mental anguish, and serious anxiety due to the petitioner’s multiple legal actions (both civil and criminal) and an administrative case.
• The respondents claimed an aggregate amount of P395,000.00.
• The petitioner, in turn, filed counterclaims for damages in several amounts, including P150,000.00 for actual damages, P550,000.00 for moral and exemplary damages, and 30% of total damages as attorney’s fees.

Stipulated Facts and Administrative Proceedings

• Before the joint trial of the cases, the parties agreed to a partial stipulation of facts, which among other points, documented administrative complaints and proceedings with the Bureau of Animal Industry.
• Key administrative actions included:
• On May 13, 1977, respondent Efren Madulid filed an administrative complaint against the petitioner.
• On January 16, 1978, the petitioner filed an administrative complaint against the respondents with the BAI.
• A Special Investigating Committee of the BAI subsequently recommended the dismissal of the petitioner’s complaint via a memorandum dated May 24, 1978.
• A series of motions for reconsideration filed by the petitioner (on August 17, 1978, and September 5, 1978) were denied, and the appeal to the Secretary of Agriculture was ultimately abandoned by the petitioner.

Trial Court Decision and Appellate Proceedings

• In the trial court, a decision rendered on November 14, 1985, initially favored the petitioner by dismissing the respondents’ complaints and awarding damages on the petitioner’s counterclaims (net of the unpaid balance).
• The respondents vigorously questioned the trial court decision, leading to the Court of Appeals reversing the trial court ruling.
• The petitioner attacked the appellate ruling on several grounds, including the alleged undue reliance on the administrative decision from the BAI, rejection of his expert evidence, and imposition of interest.

Allegations of Error Raised by the Petitioner

• The petitioner contended that the Court of Appeals:
• Wrongfully held itself bound by an allegedly void administrative decision issued without proper hearing.
• Implicitly rejected the scientific testimony of his expert veterinarians.
• Failed to conduct its own independent evaluation of the technical evidence.
• Improperly dismissed his counterclaims and imposed an obligation to pay interest.
• The petitioner’s failure to fully pursue the administrative remedies was also noted, including his decision not to adduce additional evidence even when given the opportunity.

Final Resolution of the Case

• After weighing all evidence, including the specialized findings of the BAI—which indicated that the feeds did not violate established standards and that the presence of certain ingredients did not contribute to the alleged damages—the appellate court’s decision in favor of the respondents was affirmed.
• The Supreme Court, upon review, found no reversible error in the appellate court’s evaluation and affirmed its decision on all counts with costs against the petitioner.

Issue:

Whether it was proper for the Court of Appeals to rely on the administrative decision of the Bureau of Animal Industry (BAI) Special Investigating Committee, despite the petitioner’s contention that the decision was patently void.

• The petitioner argued that the BAI decision was issued without a proper hearing and was therefore violative of his right to present evidence.
• Whether the court erred in not conducting its own independent evaluation of the technical evidence concerning the alleged adulteration of the hog feeds.
• Whether dismissing the petitioner’s counterclaims and imposing the obligation to pay interest were proper decisions.
• Whether the petitioner’s due process rights were violated by the alleged lack of notice regarding the administrative hearings.
• Whether the appellate court’s reversal of the trial court’s favorable decision for the petitioner was justified in light of the technical findings by the BAI.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)