Petitioners, V. The Honorable Court of Appeals, Willie Kho and
Petitioners, V. The Honorable Court of Appeals, Willie Kho and
Petitioners, V. The Honorable Court of Appeals, Willie Kho and
]
CONSOLIDATED PLYWOOD INDUSTRIES INC. AND HENRY LEE,
Petitioners, v. THE HONORABLE COURT OF APPEALS, WILLIE KHO AND
ALFRED C.H. KHO, Respondents.
stipulation to liquidate the cash advance obtained from Equitable Bank, for the law
would not permit said defendants to enrich themselves at the expense of the
plaintiffs."
DECISION
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals in
CA-G.R. No. 02784 entitled, "Consolidated Plywood Industries, Inc. and Henry Wee
v. Willie Kho and Alfred C.H. Kho," which modified the decision of the Court of
First Instance (now Regional Trial Court) of Baganga, Davao Oriental, by deleting
the award for moral damages, attorneys fees and actual damages in the sum of
P350,000.00 for the unfulfilled import of logs, which were granted by the trial court.
Consolidated Plywood Industries, Inc. (Corporation) and Henry Wee filed an action
for breach of contract and damages against Willie Kho and Alfred C.H. Kho with the
Court of First Instance (now Regional Trial Court) of Baganga, Davao Oriental. The
facts as summarized by the trial court are as follows:chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
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"Sometime in February, 1978, the plaintiff Corporation of which the plaintiff Henry
Wee is the President, being in the business of logging and manufacturing timber
products at its logging concession at Baganga and Caraga, Davao Oriental, on one
hand, and the defendants, father and son, who are operating a fleet of hauling trucks,
entered into a verbal hauling agreement with the following terms and conditions to
wit: that defendants shall haul the logs of the plaintiffs from the concession area to
the logpond at Baculin, Baganga, Davao Oriental, at a hauling fee of
P1.25/cu.m./km. of all species of timber, payable on weekly liquidation basis of all
timber hauled and scaled at the Baganga office of the plaintiffs.
"It was likewise agreed between the parties as a pre-condition before defendants
sending of the truck haulers to the jobsite that the plaintiffs provide financial
assistance to the defendants in the amount of P180,000.00, cash, to defray cost of
needed repairs and re-conditioning of the trucks and other expenses necessary for the
hauling operations.
It was understood that this financial assistance was in the nature of cash advance
obtained by the defendants from the Equitable Bank in the aggregate amount of
P180,000.00 on the guaranty of plaintiff Henry Wee, payable by the defendants, and
that the hauling services shall continue unless and until this loan from the Equitable
Bank remain unpaid.
"After the defendants obtained the aggregate amount of P180,000.00 from the
Equitable Bank on the guaranty of plaintiff Henry Wee by way of cash advance as
financial assistance, the defendants proceeded to the jobsite at Baculin, Baganga,
Davao Oriental, to commence the hauling service for the plaintiffs.chanrobles virtual
lawlibrary
"However, after hauling logs for about a year, or so, specifically on April 12, 1979,
the defendants, without giving notice and information to the plaintiffs, suddenly and
surreptitiously at nighttime, withdrew all its truck haulers from the jobsite and
returned to its base in Tagum, Davao del Norte, all in violation of the terms of the
hauling agreement, particularly, the repayment of the cash advance to P180,000.00
obtained from the Equitable Bank, and that the hauling should continue until the said
amount is fully paid.
"Evidence on record show that all hauling services had been paid by the plaintiffs. In
fact, it appears that from cash vales in the course of the hauling operation; the
defendants have incurred an overdraft of P10,726.53 still unliquidated.
"Due to the sudden and surreptitious abandonment by the defendants of its hauling
obligation in bad faith several logs have been left unhauled from the area which
spawned serious and varied consequences to the great damage and prejudice of the
plaintiffs.
"The Aquarius Trading, a Taiwan log importer of the plaintiffs, have charged the
plaintiffs of P56,000.00 reimbursements representing cancellation fee of a chartered
vessel, LC extension fee and other charges due to plaintiffs unfulfilled commitment
of 1,500 cu. m. of logs because of the failure of hauling by the defendants on the due
date to the logpond. The plaintiffs, as a result, failed to realize a profit of
P150,000.00.
"During the interim period between the sudden abandonment by the defendants in
April, 1979 to May, 1979 when the plaintiffs have no immediate replacement
haulers, the plaintiffs could have produced 5,000 cu. m. of logs, to fill other
commitments, or a loss of P350,000.00, was suffered by plaintiffs.
"The defendants violation of its undertaking also resulted in exposing the plaintiff
Henry Wee to liability to the Equitable Bank for the loans he guaranteed in favor of
the defendants in the total amount of P180,000.00 which have become due, and
demands for payment resulted in unduly annoying and vexing said plaintiff which
entities him to moral damages in the amount of P200,000.00." (pp. 302-305, Rollo)
The evidence of the plaintiffs showed that they sent two (2) letters to the defendants
demanding the return to the area of the six (6) hauler trucks to be used in hauling the
logs (pp. 103-104, Rollo) but the defendants did not heed the demand.
The defendants waived their right to present evidence. Hence, on January 3, 1983, a
decision was rendered on the basis of plaintiffs evidence, the dispositive portion of
which reads:chanrobles.com.ph : virtual law library
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against
the defendants ordering the defendants, jointly and severally to:chanrob1es virtual
1aw library
(1) pay the plaintiffs the sum of P10,726.53, unpaid overdraft cash vales;
(2) pay the plaintiffs the sum of P56,000.00 reimbursement of charges of Aquarius
Trading paid by the plaintiffs;
(3) pay the plaintiffs the sum of P150,000.00 unrealized profit in the Aquarius
Trading transaction unfulfilled;
(4) pay the plaintiffs the sum of P350,000.00 unfulfilled import of logs after the
sudden withdrawal of defendants trucks;
(5) pay the plaintiffs P200,000.00 moral damages caused by the anxiety and
annoyance as a consequence of the demands of the Equitable Bank on the
defendants unpaid cash advance of P180,000.00;
(6) pay the plaintiffs attorneys fees of P20,000.00;
(7) to pay the plaintiffs litigation expenses of P40,000.00; and
(8) pay the costs.
"SO ORDERED." (pp. 306-307, Rollo)
From the decision of the trial court, the defendants appealed to the Court of Appeals
questioning the amount of damages awarded to the plaintiffs on the ground that the
awards were not supported by sufficient evidence. The other grounds assigned by the
defendants as errors were improper venue and lack of cause of action, in the latter
case, because there was allegedly no contract to be enforced.cralawnad
On August 30, 1991, as already mentioned, the Court of Appeals rendered a decision
modifying the trial courts decision. While the awards for the unpaid overdraft cash
"The act of defendants in suddenly and surreptitiously withdrawing its hauler trucks
from the jobsite and abandoning its obligation of hauling the logs is indubitably a
wanton violation of its obligation, under the contract, a neglect to perform its
obligation in bad faith more particularly. In its stipulation to liquidate the cash
advance obtained from Equitable Bank, for the law would not permit said defendants
to enrich themselves at the expense of the plaintiffs." (p. 305,
Rollo).chanrobles.com.ph : virtual law library
damages incurred by him because the private respondent ignored petitioners letters
demanding that they return to the area and perform their obligations.
ACCORDINGLY, the decision of the Court of Appeals is MODIFIED. The award of
P50,000.00 as moral damages and P20,000.00 as attorneys fees are hereby granted
in addition to the damages awarded by the appellate court.
SO ORDERED.
The award for attorneys fees by the trial court in the amount of P20,000.00 is
likewise proper. Petitioner was forced to litigate in court for the recovery of actual