Case Summary (G.R. No. 264746)
Antecedents
Coca-Cola is a corporation involved in the production and distribution of soft drinks. On November 26, 2012, Coca-Cola filed a Complaint with the Regional Trial Court (RTC) for the collection of PHP 649,316.00 from Marcelina, asserting that this amount was owed for products delivered to Vedge Trading under a dealership agreement. Marcelina disputed the existence of such an agreement, claiming her nephews managed the business, and filed a Third Party Complaint against them, seeking to hold them liable for the debt.
Initial Trial Court Ruling
The RTC, in its Decision issued on December 28, 2018, dismissed both the Complaint and the Third Party Complaint for lack of cause of action. It expressed skepticism about the existence of the dealership agreement due to the absence of the actual contract in evidence but acknowledged that Coca-Cola made deliveries supported by invoices. Ultimately, the RTC characterized the arrangement as a partnership between Marcelina and Erasga, finding that Coca-Cola could not pursue Marcelina for the debt since the partnership was not a party to the case.
Court of Appeals Ruling
On February 18, 2022, the Court of Appeals (CA) reversed the RTC’s decision, ruling that Marcelina was indeed liable for the amount claimed by Coca-Cola, supported by several delivery invoices and the presumption of her ownership over Vedge Trading. The CA stated that Marcelina's representations as the sole proprietor and her involvement in the business operations were sufficient to establish her liability. The CA's decision included a detailed outline of the amounts owed, with legal interest accruing from specified dates.
Petitioner’s Arguments
Marcelina contended in her Petition that Coca-Cola failed to present the written dealership agreement, thereby rendering their Complaint baseless. She also questioned the credibility of Coca-Cola's witnesses and maintained that the actual operators of the business were her nephews, not her.
Respondent’s Arguments
Coca-Cola countered that Marcelina's claim lacked merit since she represented herself as the sole proprietor of Vedge Trading, and that the absence of a written agreement did not negate the existence of a contract substantiated through other evidence. The third-party respondents argued that they should not bear any responsibility as they were mere employees of Vedge Trading.
Legal Issues
The Court was faced with two primary issues: (1) whether the CA's ruling that Marcelina was liable for Coca-Cola's unpaid products was correct and (2) whether the third-party defendants could be held liable for the debt.
Court's Ruling
The Court upheld the CA's decision, confirming that Marcelina was liable for the full amount of the outstanding debt. The Court clarified that although Marcelina was an undoubted business partner, she could recover from Erasga his proportional share of any debt incurred to Coca-Cola once she paid the obligation. The agreement between Coca-Cola and Vedge Trading was recognized as valid despite the lack of written documentation.
Analysis of the Agreement
The Court explained that although Coca-Cola did not present a written dealership agreement, the delivery invoices served as sufficient evidence of the contractual relationship. The invoices constituted actionable documents that established Marcelina’s receipt of the Coca-Cola products, as per the provisions of the Revised Rules on Evidence.
Findings on Ownership and Liability
By registering Vedge Trading under her name, Marcelina was deemed the lawful owner and hence responsible for its debts. The Court highlighted the principles behind Act No. 3883, which necessitates businesses to register under their true names to uphold accountability in business transactions.
Partnership Conclusion
The Court asserted that a partnership was established between Marcelina and Erasga, leading to shared liability for bus
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Background and Case Antecedents
- Coca-Cola Bottlers Philippines, Inc. (Coca-Cola) is engaged in production, distribution, and sale of soft drinks.
- Coca-Cola filed a complaint for collection of a sum of money against Marcelina Villanueva operating as Vedge Trading.
- Coca-Cola claimed a dealership agreement existed, granting Vedge Trading an exclusive area and a credit line with delivery of products subject to payment within seven days.
- Delivery invoices and statements of accounts were submitted as proof of delivery and outstanding debt totalling PHP 649,316.00.
- Marcelina denied knowledge of any dealership agreement but admitted being the registered owner of V.E.D.G.E. Trading with management by her nephews.
- Marcelina filed a third-party complaint against her nephews, claiming they should be liable for the unpaid products.
- Marcelina claimed to have severed ties with her nephews and ceased operation in 2010, further substantiated by affidavit and city treasurer’s certification.
Proceedings in Trial Court (RTC)
- The RTC dismissed Coca-Cola's complaint and Marcelina's Third Party Complaint for lack of cause of action.
- The RTC doubted Coca-Cola's claim due to non-presentation of a written dealership agreement.
- The court acknowledged Coca-Cola's evidence of deliveries via invoices.
- Found that Vedge Trading was effectively a partnership between Marcelina and Erasga.
- Held partnership liable for debts, not Marcelina personally, since partnership assets were not exhausted and partnership was not impleaded.
Court of Appeals (CA) Decision
- The CA reversed RTC's decision, holding Marcelina personally liable for the unpaid debts.
- Affirmed by evidence of delivery invoices and statements of account as prima facie proof under Rules of Court.
- Relied on Marcelina's judicial admissions about registering Vedge Trading and frequent visits to its warehouse.
- Testimonies from employees corroborated Marcelina's active involvement.
- Denied third party defendants' liability for the unpaid accounts.
Issues Before the Supreme Court
- Whether the CA correctly held Marcelina liable for the unpaid products.
- Whether the third party defendants are liable for the unpaid products.
Supreme Court’s Ruling
- Affirm