Title
Brillo Handicrafts, Inc. vs. Court of Appeals
Case
G.R. No. 109090
Decision Date
Aug 7, 1996
Brillo disputed Daily's freight rate, claiming it exorbitant and based on a P2.20 rate from a petroleum hauler case. The Supreme Court ruled the P2.20 rate inapplicable to Daily, as it was provisional and for petroleum haulers only. Brillo, a regular customer, was estopped from disputing the agreed rate after years of acquiescence and partial payment. The agreed rate (P32.00 and P41.00) was binding and upheld.
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Case Digest (G.R. No. 109090)

Facts:

  1. Parties Involved:

    • Petitioner: Brillo Handicrafts, Inc. (Brillo), a regular customer of Daily Overland Express, Inc. (Daily).
    • Respondent: Daily Overland Express, Inc. (Daily), a forwarding business engaged in transporting goods between Legazpi City and Manila.
  2. Outstanding Balance:

    • 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.
    • Brillo paid P20,000.00 in October 1990, leaving a balance of P130,204.10.
  3. Dispute Over Freight Rates:

    • Brillo claimed the balance was exorbitant and overstated, arguing that Daily failed to provide proper accounting based on the prescribed rate of P2.20 per ton per kilometer.
    • Daily filed a complaint for the unpaid balance, including 15% attorney’s fees, P10,000.00 litigation expenses, and costs of suit.
  4. Commissioner’s Report:

    • A commissioner (CPA) was appointed to resolve the accounting issue.
    • Two computations were presented:
      • First Computation: Based on Daily’s rate, Brillo’s liability was P109,741.66.
      • Second Computation: Based on Brillo’s claimed rate of P2.20 per ton per kilometer, liability was P3,658.76.
  5. Applicability of P2.20 Rate:

    • Brillo insisted the P2.20 rate applied, citing the Philippine Federation of Petroleum Haulers Association (Case No. 84-6382), which fixed this rate for petroleum haulers.
    • Daily argued the rate did not apply to them as they were not petroleum haulers and were not parties to the case.
  6. Trial Court Decision:

    • The Regional Trial Court ruled in favor of Daily, holding that the P2.20 rate was inapplicable and that the agreed rate (P32.00 from Legazpi to Manila and P41.00 from Manila to Legazpi) should apply.
    • Brillo was ordered to pay P109,741.66, plus 12% interest, P10,000.00 attorney’s fees, and P5,000.00 commissioner’s fees.
  7. Appeal to the Court of Appeals:

    • The Court of Appeals affirmed the trial court’s decision but modified the reimbursement of commissioner’s fees to P2,500.00 and deleted the P10,000.00 attorney’s fees.

Issue:

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Ruling:

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Ratio:

  1. Provisional Rates:

    • Rates fixed in administrative or judicial decisions are provisional and limited to the parties and circumstances involved. They do not automatically apply to unrelated parties or situations.
  2. Estoppel and Laches:

    • A party that acquiesces to a rate or condition for an unreasonable length of time cannot later dispute it. Brillo’s failure to object to the rate earlier and its partial payment estopped it from challenging the rate.
  3. Freedom to Contract:

    • Parties are free to agree on rates and terms, and such agreements are binding unless contrary to law, morals, or public policy.
  4. No Reversible Error:

    • The Court found no reversible error in the Court of Appeals’ decision, as it was consistent with the law and evidence.

Conclusion:

The Supreme Court upheld the decision of the Court of Appeals, ruling that the P2.20 rate did not apply to Brillo and that Brillo was estopped from disputing the agreed rate after years of acquiescence and partial payment.


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