Case Summary (G.R. No. L-31979)
Factual Background
In 1985 CEC leased construction equipment to RICC, resulting in unpaid rentals of ₱342,909.38. On December 19, 1985, RICC, through Aller Jr., executed an Agreement confirming the balance and offsetting ₱115,000.00 in construction materials, reducing the debt to ₱227,909.38. On December 18, 1985, RICC issued post-dated checks amounting to ₱10,000.00, which were dishonored and re-added to the account, bringing the total to ₱237,909.38. On July 24, 1986, CEC demanded payment of ₱237,909.38 by July 31, 1986; RICC requested 30 days’ extension. RICC later claimed it had overpaid by ₱12,000.00, based on Equipment Daily Time Reports covering May 2 to June 14, 1985, reflecting only 191 hours of use.
Trial Court Findings
On December 19, 1990, the RTC of Makati ordered RICC to pay CEC ₱237,909.38 with legal interest from July 31, 1986, litigation expenses of ₱2,000.00, attorney’s fees of 20% of the sum due, and costs of suit. The court held (1) the December 19, 1985 Agreement was valid, reflected the true intention of the parties, and could not be partially repudiated; (2) RICC’s evidence of partial daily time reports was incomplete, failing to cover the full lease period of March 28 to July 12, 1985.
Court of Appeals Ruling
On July 29, 1994, the Court of Appeals affirmed the RTC decision. It adopted the trial court’s findings on the validity of the Agreement, the binding effect of admissions under Section 8, Rule 8 of the Rules of Court, and estoppel under Article 1431 of the Civil Code.
Issues on Appeal
- Whether the Agreement of December 19, 1985 is unenforceable for want of authority and board approval by RICC.
- Whether RICC fully discharged or overpaid its rental obligation by offsetting P115,000.00 in materials and by application of the May 2 to June 14, 1985 time reports.
Validity of the Agreement
The Supreme Court held that RICC, having limited its appellate argument before the Court of Appeals to the issue of full payment, cannot thereafter challenge the Agreement’s validity. Moreover, RICC’s unsworn traversals admitted the Agreement’s genuineness and due execution under Section 8, Rule 8 of the Rules of Court and Article 1431 of the Civil Code. Contracts must be considered in toto (Art. 1308, New Civil Code) and cannot be selectively repudiated.
Computation of Obligations and Estoppel
The Cour
...continue readingCase Syllabus (G.R. No. L-31979)
Facts
- In 1985 Contractors Equipment Corporation (CEC) leased various construction equipment to Roblett Industrial Construction Corporation (RICC), resulting in unpaid rent totaling ₱342,909.38.
- On 18 December 1985, RICC issued postdated checks amounting to ₱10,000.00 to CEC; the checks were dishonored and the amount was re-debited to RICC’s account, raising its balance to ₱237,909.38.
- On 19 December 1985, RICC, through Assistant Vice President for Finance Candelario S. Aller Jr., entered into a written Agreement with CEC confirming the outstanding account and providing for an offset of ₱115,000.00 in construction materials, leaving a net balance of ₱227,909.38, later adjusted to ₱237,909.38 after the dishonored checks.
- On 24 July 1986, General Manager Mariano R. Manaligod Jr. of CEC sent a letter of demand to RICC’s Vice President for Finance, demanding settlement of the ₱237,909.38 balance by 31 July 1986.
- RICC requested a 30-day extension to raise funds but did not settle the account within that period.
Contentions of the Parties
- RICC (defendant) claimed that:
• Aller Jr. signed the Agreement merely to obtain proof of payment and without Board approval or proper authority.
• After audit, it discovered it had overpaid CEC by approximately ₱12,000.00 based on Equipment Daily Time Reports covering 2 May to 14 June 1985 (191 hours at ₱540.00 per hour, totaling ₱103,140.00). - CEC (plaintiff) countered that:
• It furnished RICC a statement of account from 28 March to 12 July 1985 in the amount of ₱376,350.18, which RICC never questioned.
• From that amount, deductions of ₱3,440.80 and payments of ₱30,000.00 produced the balance of ₱342,909.38 reflected in the Agreement.