Dee Hwa Liong Foundation Medical Center v. Asiamed Supplies
REITERATIONFacts
1. The Antecedents: Dee Hwa Liong Foundation Medical Center (DHLFMC) entered into a Contract of Sale with Asiamed Supplies and Equipment Corporation (Asiamed) for the purchase of a GammaMed Plus Brachytherapy machine and a Gammacell Elan 3000 blood irradiator for P31,000,000.00. The contract stipulated payment within two working days of delivery and prior to installation. The machines were delivered in May and July 2003. DHLFMC made partial payments totaling P5,300,000.00 but failed to pay the remaining balance. Asiamed alleged that DHLFMC refused to pay the balance despite demands. DHLFMC, however, claimed the purchase was conditioned on the approval of a loan from Planters Development Bank, which was not obtained. 2. Procedural History: Asiamed filed a complaint for sum of money against DHLFMC and Anthony Dee before the Regional Trial Court (RTC). The RTC issued a writ of preliminary attachment, leading to the seizure of some equipment. After trial, the RTC ruled in favor of Asiamed, ordering DHLFMC and Anthony Dee to pay the balance of P25.7 million with interest, attorney's fees, and costs. The RTC denied DHLFMC's counterclaim. DHLFMC and Anthony Dee appealed to the Court of Appeals (CA). The CA affirmed the RTC's decision, finding no basis for the rescission claim and holding Anthony Dee jointly and severally liable. The CA also granted Asiamed's motion for substitution after Anthony Dee passed away during the appeal. 3. The Petition: Petitioners filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. They argue that the Contract of Sale was rescinded due to the unapproved loan, that Anthony Dee should not be held jointly and severally liable due to the separate corporate personality of DHLFMC, and that the interest and attorney's fees stipulated in the delivery invoices were unilaterally imposed and unconscionable. Petitioners also contend that the attachment proceedings were improper and that the award of attorney's fees was baseless. They further argue that the CA erred in ordering the appointment of an administrator for Anthony Dee's estate. The Supreme Court denied the petition, finding no reversible error in the assailed decisions.
Issue(s)
Whether or not the Contract of Sale was rescinded. Whether or not petitioner Anthony Dee was properly held solidarily liable with petitioner Dee Hwa Liong Foundation Medical Center. Whether or not the interest rate and attorney's fees stipulated in the delivery invoices are binding on the parties. Whether or not the Court of Appeals erred in granting respondent Asiamed Supplies and Equipment Corporation's motion to procure the appointment of an administrator for the estate of deceased petitioner Anthony Dee.
Ruling
The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. The Court held that the Contract of Sale was not rescinded, Anthony Dee was properly held solidarily liable, the interest and attorney's fees stipulated in the delivery invoices were binding, and the CA did not err in granting the motion for substitution and ordering the procurement of an administrator for Anthony Dee's estate.
Ratio Decidendi
On whether the Contract of Sale was rescinded: The Court reiterated that a petition for review under Rule 45 is limited to questions of law. The factual determination by the Court of Appeals that the Contract of Sale's effectivity did not depend on the Planters Bank loan was binding on the Supreme Court. Petitioners failed to show how this factual determination was an error of law, as their arguments hinged on an appreciation of evidence, such as the testimony of respondent's vice president and the draft letter regarding modification of the agreement. The Court found that the Contract of Sale itself did not mention any loan contingency, and the unsigned draft letter did not constitute proof of rescission or respondent's conformity to it. Therefore, the petitioners failed to substantiate any exception to the rule that factual findings of the CA are conclusive. On whether petitioner Anthony Dee was properly held solidarily liable: The Court affirmed the CA's finding that petitioners were estopped from invoking the separate juridical personality of DHLFMC. This was based on their specific denial in their Answer to the complaint's allegation regarding DHLFMC's corporate circumstances, stating they "never represented that [petitioner] DHLFMC is a corporate entity duly organized and existing." By denying its corporate existence, they could not later use that separate personality as a shield for Anthony Dee's liability. The Court found no error in the CA's appreciation of this specific denial and rejected the argument that Anthony Dee acted without bad faith, as the primary issue was the estoppel arising from their own pleadings. On whether the interest rate and attorney's fees stipulated in the delivery invoices are binding: The Court held that the stipulations on 12% interest and 25% attorney's fees in the delivery invoices were binding. It was undisputed that these charges were provided for in the invoices, which were signed by petitioner Anthony Dee and Mr. Mateo. The Court cited BF Corp. v. Court of Appeals, stating that a contract may be contained in several instruments with non-conflicting terms, and it is sufficient if unsigned instruments are clearly identified or referred to and made part of the signed instrument. Although petitioners claimed these were contracts of adhesion signed without informed consent, they failed to prove this. The RTC and CA found that the parties mutually agreed to these terms as a factual matter, and the mere allegation of lack of informed consent, without proof, was insufficient to warrant review. On whether the Court of Appeals erred in granting the motion for substitution: The Court found no error in the CA's order allowing respondent to procure an administrator for the estate of the deceased petitioner Anthony Dee. This order was based on Rule 3, Section 16 of the Rules of Court, which mandates counsel to inform the court of a party's death and provide the legal representative's details. If counsel fails to do so, the court may order the opposing party to procure the appointment of an executor or administrator. The petitioners' objection was based on a liberal interpretation of the rules, which the Court found insufficient to overturn the CA's application of the procedural rule.
Main Doctrine
A petition for review under Rule 45 of the Rules of Court generally pertains to questions of law, and factual findings of lower courts, when affirmed by the Court of Appeals, are binding on the Supreme Court, unless specific exceptions are proven. Parties are estopped from invoking the separate juridical personality of a corporation if they themselves denied its corporate existence in their pleadings. Stipulations on interest and attorney's fees in signed delivery invoices are binding, even if they are considered contracts of adhesion, absent proof of lack of informed consent or unconscionability.