Case Digest (G.R. No. L-29492)
Facts:
The case involves Bataan Hardwood Corporation and its co-defendants Mauro B. Ganzon and Domingo B. Sanchez as petitioners, and Dy Pac & Co. Inc. as the respondent. The events leading to the case began on January 21, 1960, when Dy Pac & Co. Inc. entered into a contract with Bataan Hardwood Corporation, wherein Dy Pac would advance funds for logs that Bataan Hardwood would sell. Subsequently, Bataan Hardwood accrued a debt of P21,000.00 to Dy Pac, which was acknowledged in a new contract dated July 6, 1960. This contract outlined a payment plan, including monthly installments and interest, and stipulated that Bataan Hardwood would mortgage a vessel named "Batman ex LCT 1282" as security for the debt.
Despite the agreement, Bataan Hardwood failed to make timely payments and did not insure the vessel as required. By October 19, 1960, only P2,250.00 had been paid, and by November 4, 1960, Dy Pac sent a final demand letter for payment. Bataan Hardwood made a pa...
Case Digest (G.R. No. L-29492)
Facts:
Contractual Agreement
- On January 21, 1960, Dy Pac & Company (plaintiff-appellant) and Bataan Hardwood Corporation (defendant-appellee) entered into a contract where Dy Pac would advance money to Bataan Hardwood for logs, which Bataan Hardwood would sell to Dy Pac.
- By July 6, 1960, Bataan Hardwood owed Dy Pac P21,000.00, confirmed in a new contract (Exhibit A). The contract stipulated:
- Payment of P21,000.00 with 1% monthly interest starting July 1, 1960.
- Installments of P1,500.00 per month, split into two payments of P750.00 every 15th and 30th of the month, starting July 15, 1960.
- From January 9, 1961, the balance would be paid at P1,000.00 per week, deducted from the purchase price of logs sold to Dy Pac.
Security and Penalties
- As security, Bataan Hardwood and Mauro B. Ganzon mortgaged a vessel, "Batman ex LCT 1282," in favor of Dy Pac.
- Domingo B. Sanchez agreed that the mortgage would be superior to his prior mortgage on the vessel.
- Bataan Hardwood was required to insure the vessel for at least P30,000.00 in favor of Dy Pac.
- In case of default, Dy Pac could terminate the contract, and the entire outstanding balance would become due. A penalty of P100.00 per day would apply after a 5-day demand period.
- If Dy Pac foreclosed the mortgage, the penalty would be added to the principal plus an additional 25% of the total amount due.
Breach of Contract
- Bataan Hardwood failed to insure the vessel and was irregular in paying installments and interest.
- By October 19, 1960, Bataan Hardwood had only paid P2,250.00 in installments and interest up to August 15, 1960.
- Dy Pac sent multiple demand letters, and on November 4, 1960, sent a final demand letter.
- Bataan Hardwood responded by paying two additional installments of P1,500.00 but still owed P17,250.00.
- Dy Pac insured the vessel itself, spending P2,131.56 on premiums and documentary stamps.
Legal Action
- On August 28, 1961, Dy Pac filed a complaint in the Court of First Instance of Manila, seeking:
- Possession of the vessel for foreclosure.
- Payment of P17,250.00 with 1% monthly interest.
- Penalty of P100.00 per day from November 14, 1960.
- Reimbursement of P2,131.56 for insurance premiums.
- Attorney’s fees equivalent to 25% of the total amount due.
Trial Court Decision
- The trial court ruled in favor of Dy Pac, ordering Bataan Hardwood, Ganzon, and Sanchez to pay:
- P17,250.00 with 1% monthly interest from August 16, 1960.
- P2,131.56 with legal interest from the filing of the complaint.
- Attorney’s fees of P300.00.
- The court denied Dy Pac’s request for the P100.00 daily penalty and 25% attorney’s fees, deeming the penalty immoral and the attorney’s fees sufficient.
Appeal to the Court of Appeals
- Both parties appealed. Bataan Hardwood’s appeal was dismissed for failure to file a brief.
- The Court of Appeals modified the trial court’s decision:
- Increased attorney’s fees to P2,000.00.
- Awarded P2,000.00 as liquidated damages for the penalty clause.
- Declared Dy Pac entitled to possession of the vessel for extrajudicial foreclosure.
Motion for Reconsideration
- Bataan Hardwood moved to reduce the attorney’s fees and penalty.
- The Court of Appeals reduced the attorney’s fees to P800.00 but upheld the rest of the decision.
Issue:
- Whether the Court of Appeals erred in granting separate reliefs for replevin and recovery of a sum of money, arising from a single cause of action.
- Whether the penalty of P100.00 per day was valid and enforceable.
- Whether the attorney’s fees awarded were reasonable.
Ruling:
- The Supreme Court affirmed the Court of Appeals’ decision with modifications:
- The appellate court did not err in granting separate reliefs for replevin and recovery of a sum of money, as these arose from a single cause of action (breach of contract).
- The penalty of P100.00 per day was valid but reduced to P2,000.00 as liquidated damages.
- Attorney’s fees were increased to P2,000.00, including an additional P1,200.00 for services rendered in the Supreme Court.
- The Court emphasized that a single cause of action can give rise to multiple reliefs, and splitting causes of action is prohibited.
Ratio:
- (Unlock)