Gamboa v. Philippine National Bank
REITERATIONFacts
The Antecedents: During the 1971-1972 crop year, Pampanga Sugar Mills (PASUMIL) issued negotiable sugar quedans to planters. These planters subsequently negotiated or sold their quedans to traders, including the petitioners. Upon presentation of these quedans to PASUMIL, the petitioners discovered that there was no physical sugar to back them up. To resolve this issue, a conference was held, resulting in an agreement that no quedans for the 1972-1973 crop year would be issued, and the sugar produced would be used to service the outstanding quedans. While partial withdrawals were made, the petitioners were ultimately unable to withdraw their shares of the physical sugar earmarked for the 1973-1974 crop year. This situation arose because the Philippine National Bank (PNB) took over the management and assets of PASUMIL on May 25, 1974, pursuant to specific Letters of Instructions, preventing the distribution of the earmarked sugar to creditors like the petitioners. Procedural History: On October 19, 1981, the petitioners filed a complaint before the Regional Trial Court of Manila, seeking to recover the proceeds from the sale of sugar, alleging specific quantities and a price of P160 per picul, along with claims for actual and moral damages from PNB. The trial court rendered a decision on October 12, 1988, ordering PNB to pay the petitioners specific amounts, with 14% interest per annum from the date of filing the complaint, and attorney's fees. The trial court revised the computation based on an agreement pegging the sugar price at P56.00 for domestic sugar and P66.00 for export sugar, with 14% interest per annum. Both parties appealed this decision to the Court of Appeals, which affirmed the trial court's ruling in its entirety. The petitioners' subsequent motion for reconsideration was also denied by the appellate court. The Petition: The petitioners filed the instant petition for review on certiorari with the Supreme Court, raising three main issues: (1) whether PNB's liability should be computed at P160 per picul instead of the P56/P66 per picul determined by the lower courts; (2) whether actual and moral damages were sufficiently proven; and (3) whether the interest due should commence from the filing of the action on October 19, 1981. The Supreme Court denied the petition, affirming the Court of Appeals' decision with modifications regarding the commencement of the stipulated 14% per annum interest and the imposition of 12% per annum legal interest from the finality of the judgment until full satisfaction.
Issue(s)
Whether petitioners established PNB's liability at P160 per picul of sugar. Whether actual and moral damages were duly proven. Whether the trial court correctly ruled that interest due petitioners should commence from the filing of the action.
Ruling
The petition is denied. The Court of Appeals' decision is affirmed with modifications regarding the commencement of stipulated interest and the imposition of legal interest upon finality of the judgment.
Ratio Decidendi
On the basis of PNB's liability (P160 vs. P56/P66 per picul): The Court held that petitioners failed to present competent evidence, such as receipts or transactional documents, to substantiate their claim that the sugar was sold at P160 per picul. The testimonies of their witnesses were given little credence due to the lack of supporting documentation. Conversely, the memorandum of the Sugar Quota Administrator, which embodied the agreement pegging the sugar price at P56 for domestic and P66 for export sugar, with 14% interest per annum, carried more weight. The Court emphasized that the agreement reduced to writing is the best evidence of the parties' intention and binds them. Therefore, PNB's liability should be based on the P56/P66 per picul rate. On the proof of actual and moral damages: The Court affirmed the trial court's ruling that there was no sufficient proof to support the award of actual and moral damages. For actual damages, Article 2199 of the Civil Code requires competent proof of the actual amount of loss, substantiated by receipts. Petitioners failed to present such evidence. Regarding moral damages, the Court reiterated that recovery is an exception and requires satisfactory proof of suffering and that the injury sprang from grounds listed in Articles 2219 and 2220 of the Civil Code. Although petitioners alleged impairment of their business reputation, no evidence was presented to support this claim. On the commencement of interest accrual: The Court ruled that the stipulated 14% per annum interest should commence from October 19, 1981, the date of the filing of the complaint (judicial demand), until the finality of the decision. While PASUMIL initially reneged on its obligation, an extension was implicitly given. However, when PNB sold the earmarked sugar, a breach of agreement occurred, entitling petitioners to the stipulated interest. The filing of the complaint served as the judicial demand that triggered the accrual of interest. Furthermore, as per Eastern Shipping Lines, Inc. v. Court of Appeals, legal interest of 12% per annum shall be imposed from the time the judgment becomes final and executory until full satisfaction.
Main Doctrine
The basis for computing PNB's liability for the sugar quedans is the price agreed upon in the memorandum, not the price alleged by the petitioners, absent competent evidence to prove the latter. Actual and moral damages require competent proof of loss, and interest accrual commences from the filing of the judicial demand.