Title
Asiatic Petroleum Co. , Ltd. vs. Veloso
Case
G.R. No. 42779
Decision Date
Dec 21, 1935
Plaintiff sued defendant for unpaid amounts from a breached agency contract. Court allowed supplemental complaint for due installments, denied recovery for future ones, and rejected defendant's counterclaims due to repeated breaches.
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Case Digest (G.R. No. 42779)

Facts:

Contract of Agency and Lease:
On December 18, 1929, the plaintiff, Asiatic Petroleum Co. (P.I.), Ltd., and the defendant, Buenaventura M. Veloso, entered into a written contract. The defendant was appointed as the plaintiff's agent to sell gasoline and oil products in Cebu City and manage the gasoline station. The contract required the defendant to account for sales and remit the proceeds to the plaintiff.

Breach of Contract:
The defendant failed to account for sales and retained the proceeds. A liquidation on December 6, 1932, revealed that the defendant owed the plaintiff P25,557.62. On the same date, the defendant executed a promissory note (Exhibit C) for P25,000, payable in installments of P500 on the 10th and 25th of each month starting January 25, 1933.

Partial Payment and Further Default:
The defendant paid seven installments (P3,500) but defaulted on the remaining payments. He also sold gasoline worth P4,414.83, of which he only remitted P16.80, leaving a balance of P4,398.03. Additionally, he incurred debts for other products (P335.92), failed to return empty barrels worth P151, and owed P57.62 for oil purchases.

Legal Action:
The plaintiff filed a lawsuit to recover the unpaid amounts. The defendant raised counterclaims, including P10,000 for wrongful attachment of his properties, P15,000 for breach of the lease contract, P1,500 for the cost of a storehouse, and P1,000 for personal property left in the station.

Supplemental Complaint:
The plaintiff filed a supplemental complaint seeking recovery of additional installments that had become due after the original complaint was filed. The trial court rejected the supplemental complaint, ruling that it could not include installments not yet due at the time of filing.

Issue:

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Ruling:

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Ratio:

  1. Admission of Supplemental Complaints: Supplemental complaints should be admitted when they involve claims that have accrued after the filing of the original complaint, provided they are related to the same transaction or subject matter. This promotes judicial efficiency and avoids multiple lawsuits.
  2. Recovery of Installments: In actions for debts payable in installments, only those installments that are due and payable at the time of filing the complaint can be recovered. Future installments must be pursued through a supplemental complaint or a separate action.
  3. Breach of Contract and Rescission: A party who repeatedly breaches a contract, particularly by failing to account for and remit proceeds, is not entitled to damages or indemnity. The aggrieved party has the right to rescind the contract and recover amounts owed.
  4. Justification for Attachment: An attachment is justified when there is evidence that the defendant is disposing of property to the prejudice of the plaintiff.


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