G.R. No. 74027 - Silahis Marketing Corp. vs. Intermediate Appellate Court

Silahis Marketing Corporation (Petitioner) was defendant in the trial court action for collection of merchandise invoices.
Gregorio de Leon, doing business under the name and style of Mark Industrial Sales (Respondent), was plaintiff in the trial court action for collection.
Intermediate Appellate Court was the respondent-appellate tribunal in the present petition for review on certiorari.

On various dates in October, November and December, 1975, private respondent sold and delivered merchandise to petitioner covered by several invoices aggregating P22,213.75, payable within thirty days from invoice dates.
Private respondent claimed accrued interest of P661.03 and attorney’s fees of P5,000.00, plus litigation costs, in the complaint for collection.

Petitioner admitted the invoices but asserted affirmative defenses including a debit memo claim of P22,200.00 as unrealized profit/commission allegedly due because private respondent sold sprockets worth P111,000.00 directly to Dole Philippines, Inc. without coursing the sale through petitioner.
Petitioner also asserted a claim to have an amount cancelled for a defective stainless steel screen (Exhibits ‘6‑A’ and ‘6‑B’) returned by Borden International, Davao City.

Trial court, Judge Bienvenido C. Ejercito, rendered decision dated August 25, 1978.
The court found petitioner liable on the unpaid invoices but allowed partial offset by petitioner’s debit memo of P22,200.00, reasoning that evidence showed a direct sale of sprockets for P111,000.00 which deprived petitioner of a 20% commission.
The court denied petitioner’s claim for cancellation of P6,000.00 for the stainless screen as being presented too late.
After deducting P22,200.00 from P22,213.75, the court found an unpaid balance of P13.75 in favor of plaintiff and ordered defendant to pay P13.75 with interest at 12% per annum from July 1, 1976, without pronouncement as to costs.

Private respondent appealed the trial court decision challenging the partial compensation and the lower court’s failure to award interest on principal and attorney’s fees.
The Intermediate Appellate Court, Fourth Civil Cases Division (Veloso, J., ponente), rendered decision dated March 17, 1986, setting aside the trial court decision and dismissing petitioner’s counterclaim for lack of factual or legal basis.
The appellate court found no evidence of any agreement, verbal or otherwise, nor contractual obligation prohibiting private respondent from making direct sales to Dole Philippines, Inc.
The appellate court found nothing in the debit memo obligating private respondent to pay commission to petitioner and noted the debit memo was unsigned and self‑serving.

Petitioner filed a petition for review on certiorari seeking reversal of the IAC decision insofar as it disallowed petitioner’s counterclaim for commission.
The Supreme Court adjudicated the petition, with decision promulgated December 7, 1989 (Third Division, Fernan, C.J., with Gutierrez, Jr., Feliciano, and Cortes, JJ., concurring; Bidin, J., no part).

Whether Gregorio de Leon is liable to Silahis Marketing Corporation for a commission or margin on a direct sale of sprockets to Dole Philippines, Inc. consummated without coursing the transaction through petitioner.

Whether the debit memo relied upon by petitioner constitutes a binding obligation by private respondent to pay commission.
Whether the requisites of legal compensation were present such that petitioner’s counterclaim could be set off against respondent’s claim.