Case Summary (G.R. No. 191189)
Key Dates
• October 2000 – Rice supply contract executed; nine postdated checks issued.
• November 24, 2000 – Complaint for sum of money filed in RTC, QC (Civil Case No. Q‐00‐42527).
• November 22, 2007 – RTC Decision finding both respondents solidarily liable.
• October 30, 2009 – CA Decision reversing and dismissing the complaint.
• January 29, 2014 – Supreme Court Decision denying the petition.
Applicable Law
• 1987 Philippine Constitution (decision after 1990).
• Civil Code, Art. 1311: contracts bind only parties thereto.
• Revised SC Circular No. 28-91: strict requirements for verification and certification against forum-shopping.
• Evidence doctrine: burden of proof on claimant; civil cases require preponderance of evidence.
Formation of Supply Contract and Issuance of Postdated Checks
In October 2000, Ang entered into a rice supply agreement with Manlar worth ₱3,843,220.00, paying by nine postdated checks drawn on her personal Chinabank account. Manlar delivered rice under a weekly postdated‐check arrangement. Upon presentment, two checks were dishonored for insufficient funds; the remaining seven were dishonored due to a closed account. Manlar’s oral and written demands on both respondents proved unavailing; Deyto informed Pua she could not locate Ang.
Dishonor of Checks and Demand for Payment
Manlar filed suit against both mother and daughter, seeking actual damages, interest, attorney’s fees, and costs. Deyto denied any contractual relation with Manlar, asserted that JD Grains Center was her separate milling business, and maintained Ang acted independently. Ang defaulted for failure to answer. Manlar later supplied a board resolution—dated November 8, 2000 and submitted June 7, 2001—authorizing Pua to prosecute the complaint.
Trial Court’s Findings and Ruling
The RTC credited Pua’s testimony that both respondents jointly induced deliveries and issued checks, that rice was delivered to addresses controlled by each, and that Deyto guaranteed her daughter’s checks. It held both solidarily liable for unpaid rice deliveries (₱3,843,220.00 plus interest), awarded attorney’s fees, appearance fees, and costs.
Court of Appeals’ Reversal and Grounds
The CA dismissed the complaint for lack of merit, citing two principal grounds: 1) The complaint was fatally defective for want of an initial board resolution authorizing Pua to sign the verification and certificate against forum‐shopping; a belated submission could not cure that defect under Circular No. 28-91. 2) Manlar failed to present documentary evidence proving rice deliveries to Deyto; Pua’s testimony on deliveries to her address rested on hearsay from drivers who were not presented to testify. The CA further observed that the checks were drawn solely on Ang’s account, showing no contractual obligation on Deyto’s part.
Issues on Certiorari
Manlar contested the CA’s findings, arguing: (a) Pua was properly authorized by the board to sign all pleadings, rendering the complaint valid; (b) the postdated checks themselves constituted proof of the underlying contract and deliveries; (c) evidence showed a conspiracy between mother and daughter to defraud; and (d) the CA erred in refusing to hold Deyto solidarily liable.
Supreme Court’s Ana
...continue readingCase Syllabus (G.R. No. 191189)
Facts
- Petitioner Manlar Rice Mill, Inc. is engaged in rice milling and grain sales under Philippine laws.
- Respondent Lourdes L. Deyto operates JD Grains Center, also milling and selling grains.
- Respondent Jennelita Deyto Ang (“Ang”) is Deyto’s daughter and formerly ran “Janet Commercial Store.”
- In October 2000, Ang purchased rice from Manlar worth ₱3,843,220.00 under a supply contract.
- Payment was made by nine postdated checks from Ang’s personal Chinabank account.
- Upon presentment, two checks were dishonored for insufficient funds; the remaining seven for a closed account.
- Manlar made demand for payment from Ang and Deyto; Deyto later informed Manlar that Ang could not be located.
Procedural History
- November 24, 2000: Manlar filed a Complaint for sum of money before the RTC of Quezon City (Civil Case No. Q-00-42527), alleging solidary liability of Deyto and Ang.
- Deyto filed an Answer with Compulsory Counterclaim, denying any contractual obligation and asserting Ang’s independent business.
- Ang defaulted for failure to answer summons by publication.
- June 7, 2001: Manlar submitted notarized board minutes authorizing its Sales Manager, Pablo Pua, to prosecute the case.
- July 31, 2001: RTC denied Deyto’s special defenses and held the authority issue moot due to the submitted resolution.
- Trial proceeded with Manlar presenting Pua as its sole witness, and Deyto, her son Jose D. Ang, and Chinabank officer Homer Petallano testifying for the defense.
- November 22, 2007: RTC rendered judgment holding Deyto and Ang jointly and severally liable for ₱3,843,200.00 plus 6% interest, attorney’s fees of ₱200,000.00 plus appearance fees, and costs.
Ruling of the Court of Appeals
- October 30, 2009: CA reversed and set aside the RTC decision, dismissed the complaint for lack of merit.
- Held the Complaint defective for