Case Summary (G.R. No. 111206-08)
Factual Background
On September 13, 1955, CONVETS filed a complaint in the Court of First Instance of Manila seeking the recovery of P36,000 as a commission for the sale of surplus goods known as the Caledonia Pile. The case stems from a recommendation to the NDC's general manager on July 7, 1949, to allow CONVETS a 10% straight commission for sales in which they participated as the exclusive sales agent. After a successful transaction with Joseph Behr & Sons, Inc. for the sale of spare parts, CONVETS claimed entitlement to the commission but faced refusal from the defendants.
Procedural History
Instead of answering CONVETS’ complaint, the defendants moved to dismiss on the grounds that it did not state a cause of action and that any potential claim had already prescribed. The lower court accepted both arguments and dismissed the complaint, prompting CONVETS to appeal the decision.
Cause of Action
The appeal centered on whether the complaint sufficiently stated a cause of action against NDC and the other defendants. The Supreme Court determined that the allegations presented in the complaint must be regarded as true for the purposes of a motion to dismiss. The amended complaint claimed that CONVETS had been appointed the exclusive agent for the NDC with explicit promises leading to an executed sale, thus constituting a valid cause of action for the recovery of commissions.
Merits of the Appeal
The Supreme Court found merit in the appeal, noting that the lower court had erred by dismissing the complaint based solely on documents that suggested the sale was not initiated or consummated by CONVETS. The Court emphasized that a motion to dismiss should not depend on facts outside the complaint, and any potential inconsistency should have been resolved at trial rather than through dismissal.
Claims Against LASEDECO and the Board of Liquidators
The lower court's dismissal of claims against LASEDECO and the Board of Liquidators was also found to be erroneous. The Supreme Court noted that these entities, having taken over management of the Caledonia Pile, bore responsibility for obligations incurred, including those arising from the sale to Joseph Behr & Sons, Inc.
Prescription of Action
The lower court's assertion that CONVETS' cause of action had already prescribed was incorrect. The claim was rooted in a written agency contract stipulating a commission payable within five days post
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Case Citation
- Citation: 103 Phil. 46
- G.R. No.: L-10232
- Date Decided: February 28, 1958
Parties Involved
- Plaintiff and Appellant: CONVETS, INC., a domestic corporation.
- Defendants and Appellees: NATIONAL DEVELOPMENT COMPANY (NDC), LAND SETTLEMENT AND DEVELOPMENT CORPORATION (LASEDECO), and the Board of Liquidators.
Background of the Case
- On September 13, 1955, CONVETS filed a complaint against NDC, LASEDECO, and the Board of Liquidators for the recovery of ₱36,000 as agent's commission on the sale of commodities.
- The complaint alleges that on July 7, 1949, a committee of NDC recommended that CONVETS be allowed a 10% straight commission on sales from the Caledonia Pile, a mass of surplus goods.
- A resolution from the NDC Board accepted CONVETS as the exclusive sales agent for the sale of said items.
- CONVETS informed NDC on September 28, 1949, of a buyer, Joseph Behr & Sons, Inc., which led to a contract of sale approved on November 25, 1949.
- A written agency agreement between CONVETS and NDC was executed on February 8, 1950, with retroactive effect from July 13, 1949.
Details of the Transaction
- The sale involved approximately 4,000 tons of spare parts at a price of ₱90 per ton, with payment secured by an irrevocable Letter of Credit amounting to $150,000.
- The management of the Caledonia Pile was later transferred from NDC to LASEDECO upon the promulgation of Executive Order No. 355 on