Brillo Handicrafts, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Daily Overland Express, Inc. (Daily), a forwarding business, had an outstanding balance of P153,204.10 from Brillo Handicrafts, Inc. (Brillo) for freight services rendered from February 1, 1990, to April 30, 1990. Brillo paid P20,000.00 in October 1990, leaving a balance of P130,204.10. Procedural History: Daily filed a complaint for the balance, attorney's fees, and litigation expenses. Brillo alleged the charges were exorbitant and that it suspended payment due to Daily's failure to render proper accounting based on a P2.20 per ton per kilometer rate. The issue was referred to a commissioner, who presented two computations: one resulting in P109,741.66 (with deductions) and another based on Brillo's insisted rate, yielding P3,658.76. Both parties approved the report, leaving the trial court to determine the applicable rate. The Regional Trial Court (RTC) ruled in favor of Daily, finding the P2.20 rate inapplicable and ordering Brillo to pay P109,741.66 plus interest, attorney's fees, and commissioner's fees. The Court of Appeals (CA) affirmed the RTC decision with modifications, reducing commissioner's fees and deleting attorney's fees. The Petition: Brillo filed a petition for review, assailing the CA's decision for upholding the freightage rate imposed by Daily, arguing it was contrary to law and public policy, and for applying the principle of estoppel.
Issue(s)
Whether the P2.20 per ton per kilometer rate, purportedly fixed by the Board of Transportation in Case No. 84-6382, is applicable to the freight services rendered by Daily Overland Express, Inc. to Brillo Handicrafts, Inc. Whether Brillo Handicrafts, Inc. is estopped from assailing the freightage rates charged by Daily Overland Express, Inc.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals in toto, holding that the P2.20 per ton per kilometer rate was not applicable and that Brillo Handicrafts, Inc. was estopped from disputing the rates charged by Daily Overland Express, Inc.
Ratio Decidendi
On the applicability of the P2.20 per ton per kilometer rate: The Court found that the rate cited by Brillo, from Philippine Federation of Petroleum Haulers Association (Case No. 84-6382), was specifically for petroleum products and was issued provisionally for one year from March 12, 1985. Since the freight charges in question covered the period from February 1, 1990, to April 30, 1990, more than one year had elapsed, and the provisional rate had ceased to be applicable. Furthermore, Daily was not a party to that case, nor was it a petroleum hauler, making the fixed rate inapplicable to its services. The RTC correctly noted that the government fixed special low rates for petroleum haulers due to price controls on petroleum, a factor not present in general freight services. On the principle of estoppel: The Court held that Brillo was estopped from assailing the freightage rates charged by Daily. Brillo had been a regular customer for years and had consistently paid freight charges without objection to the rates being billed by Daily. By its silence and consistent payments based on Daily's rates, Brillo tacitly accepted them. The Court found that it was too late for Brillo to object to the rates only after a lawsuit was filed for the unpaid balance. This inaction for an unreasonable length of time constituted laches, preventing Brillo from asserting a right it had implicitly waived. The principle of un ne doit prise advantage de son tort demesne (one ought not to take advantage of his own wrong) was also invoked, as Brillo had paid a part of the freightage based on the rate it now sought to dispute.
Main Doctrine
The agreed freightage rate in a contract of carriage, absent any applicable regulatory rate, is binding between the parties. Furthermore, a party who has consistently paid freight charges based on a certain rate without objection is estopped from later assailing the validity of said rate for the remaining balance.