Case Digest (G.R. No. 150780)
Facts:
Nestle Philippines, Inc. v. Fy Sons, Incorporated, G.R. No. 150780, May 05, 2006, Supreme Court Second Division, Corona, J., writing for the Court. Petitioner is Nestle Philippines, Inc.; respondent is Fy Sons, Inc. The Second Division's opinion was penned by Justice Corona; Sandoval‑Gutierrez (Acting Chairperson), Azcuna, and Garcia, JJ., concurred; Puno, (Chairperson), J. was on leave.Nestle and Fy Sons entered into a distributorship agreement dated December 23, 1988, and a deed of assignment dated December 13, 1988 assigning a P500,000 time deposit of one Calixto Laureano as security for Fy Sons’ credit purchases; a renewal and a supplemental agreement followed in 1990. Beginning July 1990 petitioner imposed penalties (P20,000 for an alleged prohibited sale) and claimed further fines for other alleged sales; Fy Sons paid the first fine but refused the second. On November 5, 1990 Nestle sent a demand and notice of termination alleging Fy Sons owed P995,319.81; when payment did not follow, Nestle applied the P500,000 time deposit as partial payment.
Fy Sons sued in RTC (Civil Case No. 90‑3169) for damages, alleging that Nestle acted in bad faith: failing to provide marketing support, withholding stocks, supporting a non‑distributor, concocting false charges, seizing the time deposit without basis, and terminating the distributorship to capture market gains developed by Fy Sons. Nestle counterclaimed for the alleged unpaid balance and damages. The Makati City RTC (Judge Oscar B. Pimentel) rendered judgment on November 10, 1997 in favor of Fy Sons ordering Nestle to pay P1,000,000 as actual damages, P100,000 exemplary damages, and P100,000 attorney’s fees, while ordering Fy Sons to pay Nestle P53,214.26 (three‑fourths costs against defendant).
Nestle appealed to the Court of Appeals (CA‑G.R. CV No. 57299). On January 11, 2001 the CA (11th Division) affirmed with modification: it increased actual damages from P1,000,000 to P1,500,000 (which included return of the P500,000 time deposit) and deleted the P53,214.26 award. The CA and RTC both found Nestle failed to prove Fy Sons’ alleged indebtedness, that Nestle breached obligations to its distributor and acted ...(Pro-only)
Issues:
- Was the CA correct in refusing to treat Fy Sons’ officer’s courtroom statement that the unpaid balance was “around P900,000” as a judicial admission establishing liability?
- Was the CA correct in discrediting petitioner’s witness Cristina Rayos and excluding the Statement of Account/invoices as competent proof of Fy Sons’ alleged unpaid accounts?
- Did the CA err in awarding actual damages to Fy Sons (and ordering return of the P500,000 time deposit) despite petitioner’s contention that it validly terminated the distributorship under Article 1191 of the Civil Code and contractual clauses?
- Did the CA err in denying p...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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