Marubeni Corporation v. Felix Lirag
REITERATIONFacts
The Antecedents: Respondent Felix Lirag filed a complaint for specific performance and damages against petitioners Marubeni Corporation and its officers, Ryoichi Tanaka, Ryohei Kimura, and Shoichi One, claiming P6,000,000.00 for an alleged oral consultancy agreement. Lirag claimed he was hired by petitioner Ryohei Kimura on February 2, 1987, to obtain government contracts for various projects, with a promised commission of 6% of the total costs of projects obtained. Lirag alleged he performed services, including representations with government officials and submission of proposals, and that six additional projects were given to his group. One project, the Bureau of Posts project amounting to P100,000,000.00, was awarded to the "Marubeni-Sanritsu tandem." Despite demands, petitioners allegedly did not pay the consultancy fee. Procedural History: The Regional Trial Court (RTC) ruled in favor of Lirag, ordering petitioners to pay P6,000,000.00 with interest, attorney's fees, and costs. The Court of Appeals (CA) affirmed the RTC decision, finding a preponderance of evidence favoring the existence of a consultancy agreement and relying on the doctrine of admission by silence regarding petitioner Tanaka's response to a demand letter. The CA upheld the factual findings of the RTC. The Petition: Petitioners appealed to the Supreme Court, raising issues on the existence of the consultancy agreement and Lirag's entitlement to commission.
Issue(s)
Whether there was a consultancy agreement between petitioners and respondent. Whether respondent is entitled to receive a commission, assuming a consultancy agreement existed.
Ruling
The Supreme Court granted the petition, set aside the decision of the Court of Appeals, and dismissed the civil case filed before the Regional Trial Court. The Court found that the evidence did not support a solid conclusion that a consultancy agreement was agreed upon, and even if it were, the agreement would be null and void as against public policy.
Ratio Decidendi
On the existence of a consultancy agreement: The Supreme Court ruled that the respondent failed to establish his case by a preponderance of evidence. While the lower courts found a consultancy agreement, the Supreme Court found that the evidence could not support a solid conclusion. The corroborative witnesses presented by the respondent merely testified to what the respondent told them about the agreement. The Court emphasized that in civil cases, he who alleges a fact has the burden of proving it, and a mere allegation is not evidence. The respondent failed to establish his cause by a preponderance of evidence, which is required in civil cases. The Court noted that the rule that factual findings of the Court of Appeals are conclusive is subject to exceptions, such as when the conclusion is grounded on speculation, surmises, or conjectures, which the Court found to be the case here. On the entitlement to commission, assuming a consultancy agreement existed: Assuming, for the sake of argument, that an oral consultancy agreement was perfected, the respondent could not claim fees on a project not awarded to Marubeni. The respondent admitted that the Bureau of Post project was awarded to Sanritsu, not Marubeni, and that Marubeni did not participate in the bidding. Furthermore, the respondent explicitly stated he had no consultancy agreement with Sanritsu. The Court also rejected the argument that Marubeni and Sanritsu were sister corporations, thus piercing the veil of corporate fiction, as there was no clear and convincing evidence of wrongdoing. The Court found the claim that Sanritsu was an agent of Marubeni too conjectural. Moreover, the Court found that the services rendered by the respondent contemplated the exploitation of personal influence and solicitation on a public officer, which is contrary to public policy. The Court cited that any agreement entered into because of the actual or supposed influence which the party has, engaging him to influence executive officials in the discharge of their duties, is contrary to public policy and therefore, unenforceable. Thus, even if an agreement existed, it would be null and void.
Main Doctrine
An oral consultancy agreement must be proven by a preponderance of evidence. If the evidence is in equipoise, the party with the burden of proof fails. Furthermore, an agreement that contemplates the exploitation of personal influence and solicitation on a public officer is contrary to public policy and thus, null and void and unenforceable.