A.M. No. 2009-23-SC - Re: Smoking at the Fire Exit Area at the Back of the Public Information Office

Petitioner: Brillo Handicrafts, Inc. (Brillo), a regular customer of Daily Overland Express, Inc. (Daily), which is engaged in the forwarding business.
Respondents: Court of Appeals and Daily Overland Express, Inc., the latter being a franchise holder in the trucking/forwarding industry.

As of June 15, 1990, Brillo had an outstanding balance of P153,204.10 for freight services rendered from February 1, 1990, to April 30, 1990.
Despite repeated demands, Brillo paid only P20,000.00 in October 1990; subsequently, Daily filed a complaint in December 1990 for the remaining balance of P130,204.10, along with additional claims for 15% attorney’s fees, P10,000.00 in litigation expenses, and costs of suit.
In its answer, Brillo contended that the balance with interest was exorbitant, alleging that suspension of payments was due to Daily’s failure to provide proper accounting based on the agreed freight rate.

Both parties agreed that the main issue was the correct computation of the freight charges.
The matter was referred to a commissioner (a certified public accountant) who prepared a report compiling two sets of computations:

One based on Daily’s rate yielding a liability of P109,741.66 (after accounting for deductions such as freight discounts).
The other based on Brillo’s insisted rate of P2.20 per ton per kilometer, amounting to only P3,658.76.

Both parties approved the commissioner's report, leaving the trial court to determine which computation was applicable.

Before rendering judgment, the trial court received an inquiry from the Land Transportation Franchising and Regulatory Board regarding the defendant’s insisted rate.
The inquiry revealed that:

A similar rate was fixed in the case of Philippine Federation of Petroleum Haulers Association (Case No. 84-6382) for petroleum haulers.
The fixed rate of P2.20 applied only to the hauling of petroleum products, was temporary, and valid for only one year from its issuance (March 2, 1985), thus, not binding on Daily, which was not a petroleum hauler.

Accordingly, the trial court ruled on August 29, 1991, that the rate agreed upon in the contract of carriage (P32.00 from Legazpi City to Manila and P41.00 from Manila to Legazpi) should be applied, noting that Brillo had tacitly accepted Daily’s billing rate by previously paying freight charges computed on that rate.

Brillo elevated the case to the Court of Appeals, arguing that as a private entity, Daily should be bound by the fixed rate provided in Case No. 84-6382 under Commonwealth Act No. 146 (Sections 15 and 16(c)).
Brillo maintained that its liability should be computed on the lower rate (P2.20 per ton per kilometer) resulting in an amount of only P3,658.75.
The Court of Appeals, however, modified the trial court’s ruling but essentially upheld the determination that Daily’s privately set rate was applicable.
On review, the Supreme Court found that Brillo’s petition for review lacked merit, particularly on the basis of applying a temporary rate which had long expired and the inherent estoppel created by its previous conduct.

Whether the fixed rate of P2.20 per ton per kilometer, as established in the Philippine Federation of Petroleum Haulers Association case, was applicable to the freight charges in the present case.

The issue centered on whether such a rate, specifically designed for petroleum haulage, could be extended to a non-petroleum-related transaction.
Whether the temporary and provisional nature of the said rate (valid only for one year) rendered it inapplicable to the transaction period (February 1, 1990, to April 30, 1990).

Whether estoppel should bar Brillo from challenging the freight rate previously accepted and partially paid.

The argument involved Brillo’s prior acquiescence to the rate agreed upon in their contractual relationship with Daily.
Whether the doctrine of laches negated Brillo’s present contention in view of its inaction or silence when the rate was first imposed.

The determination of the correct computation for the freight charges due and whether prior partial payments bind the parties to the previously acknowledged rate.