Case Summary (G.R. No. 72703)

Case Overview

This case involves a petition for certiorari filed by Caltex (Philippines), Inc. to annul the decision of the Intermediate Appellate Court, which reversed a trial court's judgment regarding a monetary obligation stemming from a Deed of Assignment related to aviation fuel supply.

Background Facts

• Parties Involved: Caltex (Philippines), Inc. (Petitioner) and Asia Pacific Airways, Inc. (Respondent).
• Contractual Agreement: On January 12, 1978, Asia Pacific Airways entered into a two-year agreement with Caltex for aviation fuel supply.
• Outstanding Obligation: As of June 30, 1980, Asia Pacific owed Caltex ₱4,072,682.13 for fuel supplied.
• Deed of Assignment: Asia Pacific assigned its receivables from the National Treasury to Caltex as a means to settle its debt.
• Refund Request: After a Treasury Warrant was issued, Asia Pacific requested a refund of an excess amount of ₱900,000.00, resulting in a dispute over the remaining ₱510,550.63, which Caltex claimed as interest and service charges.

Judicial Proceedings

• Trial Court Decision: On November 7, 1983, the Regional Trial Court dismissed Asia Pacific's complaint seeking the return of ₱510,550.63.
• Intermediate Appellate Court Ruling: On August 27, 1985, the appellate court reversed the trial court's decision, ordering Caltex to return the amount to Asia Pacific with interest at 14% per annum.

Motion for Reconsideration and Subsequent Actions

• Petitioner's Actions: Caltex filed a motion for extension of time to file a motion for reconsideration, which was ultimately denied by the appellate court.
• Supreme Court Involvement: Caltex filed a petition before the Supreme Court, seeking to annul the appellate court's resolution and obtain a temporary restraining order against the remand for execution of judgment.

Key Legal Issues

1. Extension of Time for Motion for Reconsideration:

   • The Supreme Court ruled that the request for extension was valid based on a grace period established by previous rulings.
   • Timeframe: The grace period for filing such motions was until June 30, 1986.

2. Nature of the Deed of Assignment:

   • The court evaluated whether the Deed of Assignment constituted a "dacion en pago" (dation in payment) that would extinguish Asia Pacific's obligations.
   • Legal Principle: A dation in payment requires:
     • Performance of a prestation different from the original obligation.
     • An agreement that the obligation is extinguished upon delivery.
   • The Supreme Court found that the Deed of Assignment did not meet the criteria for total extinguishment of Asia Pacific's obligations.

Conclusions of the Supreme Court

• Reinstatement of Trial Court Decision: The Supreme Court set aside the appellate court's decision and reinstated the trial court's ruling, affirming Caltex's right to retain the interest and serv...continue reading

Case Syllabus (G.R. No. 72703)

Case Background

• The case revolves around a petition for certiorari filed by Caltex (Philippines), Inc. against the Intermediate Appellate Court and Asia Pacific Airways, Inc. (respondents).
• The petition seeks to annul the decision dated August 27, 1985, by the Intermediate Appellate Court, which reversed the trial court's judgment and ordered Caltex to refund the amount of P510,550.63 to Asia Pacific Airways, along with legal interest at the rate of 14% per annum.

Relevant Facts

• On January 12, 1978, Asia Pacific Airways entered into a two-year agreement with Caltex to supply aviation fuel.
• By June 30, 1980, Asia Pacific Airways had an outstanding obligation of P4,072,682.13 to Caltex for unpaid fuel supplied.
• To settle this debt, Asia Pacific Airways executed a Deed of Assignment on July 31, 1980, assigning its receivables from the National Treasury to Caltex.
• A Treasury Warrant for P5,475,294.00 was issued to Caltex, exceeding the assigned debt.
• Asia Pacific Airways requested a refund of the excess amount, leading Caltex to refund only P900,000.00, retaining P510,550.63, which it claimed represented interest and service charges.
• On September 13, 1982, Asia Pacific Airways filed a complaint to collect the retained amount, sparking a legal dispute.

Trial Court Proceedings

• The trial court dismissed Asia Pacific Airways' complaint on November 7, 1983, ruling in favor of Caltex.
• Asia Pacific Airways subsequently appealed to the Intermediate Appellate Court.

Intermediate Appellate Court Decision

• On Augu...continue reading