Jammang v. Takahashi Trading
REITERATIONFacts
The Antecedents: Petitioner Hadji Mahmud I. Jammang, owner of MV Queen Alma and general manager of Alma Shipping Lines, Inc., engaged in trading goods from Singapore to Jolo, Philippines. Respondent Sinotrans Shandong Company (Sinotrans) agreed to supply Chinese goods to Jammang, who would act as sales agent, with the condition that Jammang would turn over the proceeds less mark-up, and return unsold goods. Jammang and respondent Takahashi Trading Co., Ltd. (Takahashi) agreed to split profits. Sinotrans shipped goods valued at US$696,337 to Labuan, Malaysia, consigned to Takahashi. Jammang claimed ready buyers, but none existed, forcing Takahashi to warehouse the goods. Jammang then convinced Sinotrans and Takahashi to allow him to bring the goods to Zamboanga City, Philippines, promising to remit proceeds and share profits. The goods were transshipped to Zamboanga with Jammang as consignee. He made an initial remittance of US$230,000, but no further remittances followed. Procedural History: The parties executed a Supplemental Agreement on July 27, 1994, stipulating that Alma Shipping Lines, Inc. received goods worth US$696,337 from Sinotrans, had remitted US$230,000 as partial payment, would remit US$15,000 by July 29, 1994, had a collectible balance of US$266,000 due by September 15, 1994, and would sell remaining stocks valued at US$185,000 by October 31, 1994. Despite this, Jammang remitted only US$15,000. Sinotrans discovered Jammang had sold all goods but failed to account for the remaining balance of US$451,337. Respondents filed a complaint for collection of a sum of money and damages. The RTC of Pasig City ruled in favor of Sinotrans, ordering Jammang to pay US$266,000 plus interest and attorney's fees, to account for remaining stocks, and to pay costs. The CA affirmed the RTC decision in toto, and denied reconsideration. The Petition: Petitioners contend that the CA erred in holding Jammang solidarily liable with Alma Shipping Lines, Inc., arguing for separate corporate personality. They also claim Jammang was not an agent of Sinotrans, and even if he were, he is not liable for proceeds not received. Furthermore, they question the trial court's proceedings, alleging lack of opportunity to cross-examine the respondent's witness and insufficient proof of the claim. They also seek damages against the respondents.
Issue(s)
Whether petitioner Hadji Mahmud I. Jammang is solidarily liable with Alma Shipping Lines, Inc. for the obligation arising from the supplemental agreement. Whether petitioner Jammang acted as an agent of Sinotrans Shandong Company. Whether petitioner Jammang is liable for the unremitted balance of US$266,000 despite allegations of not having received the proceeds of the sale. Whether the proceedings before the trial court were conducted in accordance with due process, particularly regarding the reception of evidence and cross-examination of witnesses. Whether respondents are liable for damages to the petitioners.
Ruling
The petition is denied. The Court of Appeals did not commit any reversible error in affirming the decision of the Regional Trial Court. Petitioners are bound by the terms of the Supplemental Agreement and are liable for the unliquidated balance, attorney's fees, and costs.
Ratio Decidendi
On the issue of solidary liability between Jammang and Alma Shipping Lines, Inc.: The Court affirmed the CA's ruling that Jammang is bound by the Supplemental Agreement. The agreement explicitly stated that Alma Shipping Lines, Inc. entered into the contract, acknowledging receipt of goods and undertaking to remit proceeds. However, Jammang, as the general manager and owner of the vessel, was the one who directly transacted and executed the agreement. The Court found that Jammang's actions, particularly his assurances and execution of the supplemental agreement, bound him to the contractual obligations. The argument of separate corporate personality was deemed insufficient to shield Jammang from liability given his direct involvement and commitment in the transaction, especially since the agreement itself detailed his undertakings regarding the goods and their proceeds. The Court emphasized that Jammang's extensive experience in shipping and barter trading made his claim of merely accommodating the plaintiffs by signing the agreement, without intending to be bound, incredible. His attempt to vary the terms of the agreement after benefiting from the sale was seen as an evasion of a legally contracted obligation. On the issue of Jammang acting as an agent of Sinotrans: The Court found that the Supplemental Agreement clearly indicated Jammang's role as more than a mere facilitator or warehouseman. By acknowledging receipt of goods worth US$696,337, making partial remittances, and undertaking to remit further sums and sell remaining stocks, Jammang committed himself to act as a selling agent. The Court found no indication that he accepted the goods merely as a facilitator. His claim of a future business deal for which he merely signed the agreement to accommodate was found to be an elaborately contrived picture inconsistent with the evidence and ordinary course of things. The Court also noted that the buyers issued promissory notes in Jammang's name, not in the name of any purported agent of Sinotrans, further solidifying his role in the transaction. On Jammang's liability for unremitted proceeds: The Court held Jammang liable for the unremitted balance based on the clear terms of the Supplemental Agreement. The agreement stipulated specific amounts to be remitted and deadlines for payment, and Jammang's obligation to remit the US$266,000 was tied to collection from buyers, implying he was responsible for such collection. The Court found it incredible that an experienced businessman like Jammang would acknowledge such a significant financial obligation without intending to be bound. His attempt to claim he did not receive the proceeds of the sale was seen as an attempt to evade his contractual commitment after benefiting from the sale of the goods. The Court reiterated that the clear and unmistakable terms of the agreement left no room for doubt as to the intention of the parties. On the procedural issues regarding the reception of evidence: The Court found no reversible error in the evaluation of testimonial evidence by the trial court. The argument that the trial judge did not observe the demeanor of the witness because a legal researcher received the testimony was not given weight. The Court applied the test of whether the testimony is in conformity with knowledge and consistent with the experience of mankind. The Court found Jammang's claims, such as signing the agreement merely to accommodate and expecting huge shipping earnings from a vague "conventional trading," to be incredible given his experience. The Court also noted that the claim of seizure of goods by authorities was not substantiated by competent evidence. The Court upheld the trial court's finding that Jammang's attempt to vary the terms of the agreement was a clear illustration of evading a legally contracted obligation. On the claim for damages against respondents: The Court found no basis for the petitioners' claim for damages against the respondents. The petitioners failed to prove any reversible error on the part of the Court of Appeals or the trial court. The Court reiterated that it is not a trier of facts and will not review factual findings of the appellate court, especially when they coincide with those of the trial court. Therefore, the petition was denied.
Main Doctrine
A party who enters into a supplemental agreement acknowledging receipt of goods and undertaking to remit proceeds of sale, and subsequently fails to do so despite demands, is bound by the terms of the agreement and liable for the unliquidated balance, attorney's fees, and costs, absent sufficient proof to vary the clear terms of the contract.