Case Digest (G.R. No. 126486)
Facts:
In the case Barons Marketing Corp. v. Court of Appeals and Phelps Dodge Philippines, Inc. (G.R. No. 126486, February 9, 1998), the private respondent, Phelps Dodge Philippines, Inc., appointed the petitioner, Barons Marketing Corporation, as a dealer of electrical wires and cables beginning September 1, 1973. Under this dealer agreement, Barons Marketing was granted a 60-day credit term starting from the date of delivery of products. Between December 1986 and August 17, 1987, Barons Marketing purchased electrical products on credit from Phelps Dodge totaling Php 4,102,438.30, which it subsequently sold to MERALCO. The sales invoices issued by Phelps Dodge contained a stipulation for 12% annual interest on overdue amounts and 25% attorney's fees and collection charges on the outstanding balances.
On September 7, 1987, Barons Marketing paid Php 300,000, leaving an outstanding balance of Php 3,802,478.20. Despite repeated demands for payment, Barons Marketing requested to pay
...
Case Digest (G.R. No. 126486)
Facts:
- Appointment and Credit Terms
- On August 31, 1973, private respondent Phelps Dodge Philippines, Inc. (plaintiff) appointed petitioner Barons Marketing Corporation (defendant) as one of its dealers of electrical wires and cables, effective September 1, 1973 (Exh. A).
- The credit term granted was 60 days from the date of delivery of products (Exh. 1).
- Purchase and Payment History
- Between December 1986 and August 17, 1987, petitioner purchased electrical wires and cables on credit totaling ₱4,102,438.30 from private respondent (Exh. B to K).
- Petitioner sold these goods to MERALCO pursuant to a prior arrangement.
- The sales invoices stipulated interest at 12% per annum plus 25% attorney’s fees and collection charges on overdue accounts (Exh. BB).
- On September 7, 1987, petitioner paid ₱300,000.00, leaving an unpaid balance of ₱3,802,478.20 (Exh. S).
- Private respondent demanded full payment through several letters (Exhs. L, M, N, and P).
- Petitioner offered to pay in monthly installments of ₱500,000 plus 1% interest per month from October 15, 1987, but private respondent rejected this offer (Exh. O, O-4, P).
- Filing of Complaint and Trial Court Decision
- On October 29, 1987, private respondent filed a complaint before the Pasig Regional Trial Court to recover ₱3,802,478.20 plus interest, attorney’s fees (25% of the amount demanded), exemplary damages of at least ₱100,000, litigation expenses, and costs of suit.
- Petitioner admitted the purchases but disputed the amount and counterclaimed for damages due to alleged abuse of rights by private respondent.
- On June 17, 1991, the trial court ruled in favor of private respondent ordering petitioner to pay:
- ₱3,108,000.00 unpaid balance plus 12% interest per annum;
- 25% attorney’s fees;
- ₱10,000.00 exemplary damages;
- Costs of suit.
- Court of Appeals Decision
- Both parties appealed. Private respondent claimed entitlement to ₱3,802,478.20 as proven; petitioner claimed abuse of right and denied liability.
- On June 25, 1996, the Court of Appeals modified the trial court’s decision ordering petitioner to pay:
- ₱3,802,478.20 unpaid balance plus 12% interest per annum;
- 5% of the preceding obligation as attorney’s fees.
- Costs of suit were denied.
- Petition to the Supreme Court
- Petitioner challenges:
- The finding that private respondent was not guilty of abuse of right;
- The award of interest and attorney’s fees to private respondent.
Issues:
- Whether private respondent is guilty of abuse of right for rejecting petitioner’s offer to pay in installments and filing a collection suit.
- Whether private respondent is entitled to interest and attorney’s fees as stipulated in the sales invoices and contract.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)