1 | a g e

Gk No 11837S Cctober 3 2003

CLLLS1INA 1 NAGUIA1 pet|t|oner
vs
CCUk1 CI ALALS and AUkCkA ULAC respondents

1lnCA !

8efore us ls a eLlLlon for 8evlew on CerLlorarl under 8ule 43 assalllng Lhe declslon of Lhe SlxLeenLh
ulvlslon of Lhe respondenL CourL of Appeals promulgaLed on 21 uecember 19941 whlch afflrmed ln
LoLo Lhe declslon handed down by Lhe 8eglonal 1rlal CourL (81C) of asay ClLy2
1he case arose when on 11 AugusL 1981 prlvaLe respondenL Aurora Cueano (Cueano) flled
a complalnL before Lhe asay ClLy 81C for cancellaLlon of a 8eal LsLaLe MorLgage she had enLered lnLo
wlLh peLlLloner CelesLlna nagulaL (nagulaL) 1he 81C rendered a declslon declarlng Lhe quesLloned
8eal LsLaLe MorLgage vold whlch nagulaL appealed Lo Lhe CourL of Appeals AfLer Lhe CourL of Appeals
upheld Lhe 81C declslon nagulaL lnsLlLuLed Lhe presenL peLlLlon1vvphl1neL

1he operaLlve facLs follow
Cueano applled wlLh nagulaL for a loan ln Lhe amounL of 1wo Pundred 1housand esos (20000000)
whlch nagulaL granLed Cn 11 AugusL 1980 nagulaL lndorsed Lo Cueano AssoclaLed 8ank Check no
090990 (daLed 11 AugusL 1980) for Lhe amounL of nlneLy llve 1housand esos (9300000) whlch was
earller lssued Lo nagulaL by Lhe CorporaLe 8esources llnanclng CorporaLlon She also lssued her own
lllmanbank Check no 063314 Lo Lhe order of Cueano also daLed 11 AugusL 1980 and for Lhe amounL
of nlneLy llve 1housand esos (9300000) 1he proceeds of Lhese checks were Lo consLlLuLe Lhe loan
granLed by nagulaL Lo Cueano3
1o secure Lhe loan Cueano execuLed a ueed of 8eal LsLaLe MorLgage daLed 11 AugusL 1980
ln favor of nagulaL and surrendered Lo Lhe laLLer Lhe owner's dupllcaLes of Lhe LlLles coverlng Lhe
morLgaged properLles4 Cn Lhe same day Lhe morLgage deed was noLarlzed and Cueano lssued Lo
nagulaL a promlssory noLe for Lhe amounL of 1WC Punu8Lu 1PCuSAnu LSCS (20000000) wlLh
lnLeresL aL 12 per annum payable on 11 SepLember 19803 Cueano also lssued a SecurlLy 8ank and
1rusL Company check posLdaLed 11 SepLember 1980 for Lhe amounL of 1WC Punu8Lu 1PCuSAnu
LSCS (20000000) and payable Lo Lhe order of nagulaL
upon presenLmenL on lLs maLurlLy daLe Lhe SecurlLy 8ank check was dlshonored for
lnsufflclency of funds Cn Lhe followlng day 12 SepLember 1980 Cueano requesLed SecurlLy 8ank Lo
sLop paymenL of her posLdaLed check buL Lhe bank re[ecLed Lhe requesL pursuanL Lo lLs pollcy noL Lo
honor such requesLs lf Lhe check ls drawn agalnsL lnsufflclenL funds6
Cn 16 CcLober 1980 Cueano recelved a leLLer from nagulaL's lawyer demandlng
seLLlemenL of Lhe loan ShorLly LhereafLer Cueano and one 8uby 8uebenfeldL (8uebenfeldL) meL wlLh
nagulaL AL Lhe meeLlng Cueano Lold nagulaL LhaL she dld noL recelve Lhe proceeds of Lhe loan addlng
LhaL Lhe checks were reLalned by 8uebenfeldL who purporLedly was nagulaL's agenL7
nagulaL applled for Lhe exLra[udlclal foreclosure of Lhe morLgage wlLh Lhe Sherlff of 8lzal
rovlnce who Lhen scheduled Lhe foreclosure sale on 14 AugusL 1981 1hree days before Lhe
scheduled sale Cueano flled Lhe case before Lhe asay ClLy 81C8 seeklng Lhe annulmenL of Lhe
morLgage deed 1he Lrlal courL evenLually sLopped Lhe aucLlon sale9
Cn 8 March 1991 Lhe 81C rendered [udgmenL declarlng Lhe ueed of 8eal LsLaLe MorLgage
null and vold and orderlng nagulaL Lo reLurn Lo Cueano Lhe owner's dupllcaLes of her LlLles Lo Lhe
morLgaged loLs10 nagulaL appealed Lhe declslon before Lhe CourL of Appeals maklng no less Lhan
eleven asslgnmenLs of error 1he CourL of Appeals promulgaLed Lhe declslon now assalled before us
LhaL afflrmed ln LoLo Lhe 81C declslon Pence Lhe presenL peLlLlon
nagulaL quesLlons Lhe flndlngs of facLs made by Lhe CourL of Appeals especlally on Lhe lssue
of wheLher Cueano had acLually recelved Lhe loan proceeds whlch were supposed Lo be covered by
Lhe Lwo checks nagulaL had lssued or lndorsed nagulaL clalms LhaL belng a noLarlal lnsLrumenL or
publlc documenL Lhe morLgage deed en[oys Lhe presumpLlon LhaL Lhe reclLals Lhereln are Lrue
nagulaL also quesLlons Lhe admlsslblllLy of varlous represenLaLlons and pronouncemenLs of
8uebenfeldL lnvoklng Lhe rule on Lhe nonblndlng effecL of Lhe admlsslons of Lhlrd persons11
1he resoluLlon of Lhe lssues presenLed before Lhls CourL by nagulaL lnvolves Lhe
deLermlnaLlon of facLs a funcLlon whlch Lhls CourL does noL exerclse ln an appeal by cerLlorarl under
8ule 43 whlch governs appeal by cerLlorarl only quesLlons of law may be ralsed12 as Lhe Supreme
CourL ls noL a Lrler of facLs13 1he resoluLlon of facLual lssues ls Lhe funcLlon of lower courLs whose
flndlngs on Lhese maLLers are recelved wlLh respecL and are ln facL generally blndlng on Lhe Supreme
CourL14 A quesLlon of law whlch Lhe CourL may pass upon musL noL lnvolve an examlnaLlon of Lhe
probaLlve value of Lhe evldence presenLed by Lhe llLlganLs13 1here ls a quesLlon of law ln a glven case
when Lhe doubL or dlfference arlses as Lo whaL Lhe law ls on a cerLaln sLaLe of facLs Lhere ls a quesLlon
of facL when Lhe doubL or dlfference arlses as Lo Lhe LruLh or Lhe falsehood of alleged facLs16
Surely Lhere are esLabllshed excepLlons Lo Lhe rule on Lhe concluslveness of Lhe flndlngs of
facLs of Lhe lower courLs17 8uL nagulaL's case does noL fall under any of Lhe excepLlons ln any evenL
boLh Lhe declslons of Lhe appellaLe and Lrlal courLs are supporLed by Lhe evldence on record and Lhe
appllcable laws
AgalnsL Lhe common flndlng of Lhe courLs below nagulaL vlgorously lnslsLs LhaL Cueano
recelved Lhe loan proceeds CaplLallzlng on Lhe sLaLus of Lhe morLgage deed as a publlc documenL she
clLes Lhe rule LhaL a publlc documenL en[oys Lhe presumpLlon of valldlLy and LruLhfulness of lLs
conLenLs 1he CourL of Appeals however ls correcL ln rullng LhaL Lhe presumpLlon of LruLhfulness of
Lhe reclLals ln a publlc documenL was defeaLed by Lhe clear and convlnclng evldence ln Lhls case LhaL
polnLed Lo Lhe absence of conslderaLlon18 1hls CourL has held LhaL Lhe presumpLlon of LruLhfulness
engendered by noLarlzed documenLs ls rebuLLable yleldlng as lL does Lo clear and convlnclng evldence
Lo Lhe conLrary as ln Lhls case19
Cn Lhe oLher hand absoluLely no evldence was submlLLed by nagulaL LhaL Lhe checks she
lssued or endorsed were acLually encashed or deposlLed 1he mere lssuance of Lhe checks dld noL
resulL ln Lhe perfecLlon of Lhe conLracL of loan lor Lhe Clvll Code provldes LhaL Lhe dellvery of bllls of
exchange and mercanLlle documenLs such as checks shall produce Lhe effecL of paymenL only when
Lhey have been cashed20 lL ls only afLer Lhe checks have produced Lhe effecL of paymenL LhaL Lhe
conLracL of loan may be deemed perfecLed ArL 1934 of Lhe Clvll Code provldes
An accepLed promlse Lo dellver someLhlng by way of commodaLum or slmple loan ls
blndlng upon Lhe parLles buL Lhe commodaLum or slmple loan lLself shall noL be perfecLed unLll Lhe
dellvery of Lhe ob[ecL of Lhe conLracL
A loan conLracL ls a real conLracL noL consensual and as such ls perfecLed only upon Lhe
dellvery of Lhe ob[ecL of Lhe conLracL21 ln Lhls case Lhe ob[ecLs of Lhe conLracL are Lhe loan proceeds
whlch Cueano would en[oy only upon Lhe encashmenL of Lhe checks slgned or lndorsed by nagulaL lf
lndeed Lhe checks were encashed or deposlLed nagulaL would have cerLalnly presenLed Lhe
correspondlng documenLary evldence such as Lhe reLurned checks and Lhe perLlnenL bank records
2 | a g e

Slnce nagulaL presenLed no such proof lL follows LhaL Lhe checks were noL encashed or credlLed Lo
Cueano's accounL1awphl1neL
nagulaL quesLlons Lhe admlsslblllLy of Lhe varlous wrlLLen represenLaLlons made by
8uebenfeldL on Lhe ground LhaL Lhey could noL blnd her followlng Lhe res lnLer alla acLa alLerl nocere
non debeL rule 1he CourL of Appeals re[ecLed Lhe argumenL holdlng LhaL slnce 8uebenfeldL was an
auLhorlzed represenLaLlve or agenL of nagulaL Lhe slLuaLlon falls under a recognlzed excepLlon Lo Lhe
rule22 SLlll nagulaL lnslsLs LhaL 8uebenfeldL was noL her agenL
Sufflce Lo say however Lhe exlsLence of an agency relaLlonshlp beLween nagulaL and
8uebenfeldL ls supporLed by ample evldence As correcLly polnLed ouL by Lhe CourL of Appeals
8uebenfeldL was noL a sLranger or an unauLhorlzed person nagulaL lnsLrucLed 8uebenfeldL Lo
wlLhhold from Cueano Lhe checks she lssued or lndorsed Lo Cueano pendlng dellvery by Lhe laLLer of
addlLlonal collaLeral 8uebenfeldL served as agenL of nagulaL on Lhe loan appllcaLlon of Cueano's
frlend Marllou larralese and lL was ln connecLlon wlLh LhaL LransacLlon LhaL Cueano came Lo know
nagulaL23 lL was also 8uebenfeldL who accompanled Cueano ln her meeLlng wlLh nagulaL and on LhaL
occaslon on her own and wlLhouL Cueano asklng for lL 8eubenfeldL acLually drew a check for Lhe sum
of 22000000 payable Lo nagulaL Lo cover for Cueano's alleged llablllLy Lo nagulaL under Lhe loan
agreemenL24
1he CourL of Appeals recognlzed Lhe exlsLence of an agency by esLoppel23 clLlng ArLlcle
1873 of Lhe Clvll Code26 ApparenLly lL consldered LhaL aL Lhe very leasL as a consequence of Lhe
lnLeracLlon beLween nagulaL and 8uebenfeldL Cueano goL Lhe lmpresslon LhaL 8uebenfeldL was Lhe
agenL of nagulaL buL nagulaL dld noLhlng Lo correcL Cueano's lmpresslon ln LhaL slLuaLlon Lhe rule ls
clear Cne who cloLhes anoLher wlLh apparenL auLhorlLy as hls agenL and holds hlm ouL Lo Lhe publlc
as such cannoL be permlLLed Lo deny Lhe auLhorlLy of such person Lo acL as hls agenL Lo Lhe pre[udlce
of lnnocenL Lhlrd parLles deallng wlLh such person ln good falLh and ln Lhe honesL bellef LhaL he ls
whaL he appears Lo be27 1he CourL of Appeals ls correcL ln lnvoklng Lhe sald rule on agency by
esLoppel1awphl1neL
More fundamenLally whaLever was Lhe Lrue relaLlonshlp beLween nagulaL and 8uebenfeldL
ls lrrelevanL ln Lhe face of Lhe facL LhaL Lhe checks lssued or lndorsed Lo Cueano were never encashed
or deposlLed Lo her accounL of nagulaL
All Lold we flnd no compelllng reason Lo dlsLurb Lhe flndlng of Lhe courLs a quo LhaL Lhe
lender dld noL remlL and Lhe borrower dld noL recelve Lhe proceeds of Lhe loan 1haL belng Lhe case lL
follows LhaL Lhe morLgage whlch ls supposed Lo secure Lhe loan ls null and vold 1he conslderaLlon of
Lhe morLgage conLracL ls Lhe same as LhaL of Lhe prlnclpal conLracL from whlch lL recelves llfe and
wlLhouL whlch lL cannoL exlsL as an lndependenL conLracL28 A morLgage conLracL belng a mere
accessory conLracL lLs valldlLy would depend on Lhe valldlLy of Lhe loan secured by lL29

WPL8LlC8L Lhe peLlLlon ls denled and Lhe assalled declslon ls afflrmed CosLs agalnsL peLlLloner








Gk No 17S366 August 11 2008
InIL MAkINL INC and]or ILSUS CANDAVA and NCkMAN SnIING SLkVICLS pet|t|oners
vs
NA1ICNAL LA8Ck kLLA1ICNS CCMMISSICN and WAkLI1C L DUMALACG respondents

CA8lC MC8ALLS !

WarllLo L uumalaog (respondenL) who served as cook aboard vessels plylng overseas flled on March
4 2002 before Lhe naLlonal Labor 8elaLlons Commlsslon (nL8C) a proforma complalnL1 agalnsL
peLlLloners r mannlng agency !hll Marlne lnc (!hll) lLs Lhen presldenL !esus Candava and lLs
forelgn prlnclpal norman Shlpplng Servlces r for unpald money clalms moral and exemplary damages
and aLLorney's fees
8espondenL LhereafLer flled Lwo amended pro forma complalnLs2 praylng for Lhe award of
overLlme pay vacaLlon leave pay slck leave pay and dlsablllLy/medlcal beneflLs he havlng by hls
clalm conLracLed enlargemenL of Lhe hearL and severe Lhyrold enlargemenL ln Lhe dlscharge of hls
duLles as cook whlch rendered hlm dlsabled
8espondenL's LoLal clalm agalnsL peLlLloners was 86434330 plus 11733760 represenLlng
lnLeresL and 19392866 represenLlng aLLorney's fees3
8y ueclslon4 of AugusL 29 2003 Labor ArblLer le SuperlasoCellan dlsmlssed respondenL's
complalnL for lack of merlL
Cn appeal3 Lhe nL8C by ueclslon of SepLember 27 2004 reversed Lhe Labor ArblLer's
declslon and awarded uS$3000000 dlsablllLy beneflL Lo respondenL lL dlsmlssed respondenL's oLher
clalms however for lack of basls or [urlsdlcLlon6 eLlLloners' MoLlon for 8econslderaLlon7 havlng
been denled by Lhe nL8C8 Lhey flled a peLlLlon for cerLlorarl9 before Lhe CourL of Appeals
8y 8esoluLlon10 of SepLember 22 2003 Lhe CourL of Appeals dlsmlssed peLlLloners' peLlLlon
for lnLer alla fallure Lo aLLach Lo Lhe peLlLlon all maLerlal documenLs and for defecLlve verlflcaLlon and
cerLlflcaLlon eLlLloners' MoLlon for 8econslderaLlon of Lhe appellaLe courL's 8esoluLlon was denled11
hence Lhey flled Lhe presenL eLlLlon for 8evlew on CerLlorarl
uurlng Lhe pendency of Lhe case before Lhls CourL respondenL agalnsL Lhe advlce of hls
counsel enLered lnLo a compromlse agreemenL wlLh peLlLloners Pe Lhereupon slgned a CulLclalm and
8elease subscrlbed and sworn Lo before Lhe Labor ArblLer12
Cn May 8 2007 peLlLloners flled before Lhls CourL a ManlfesLaLlon13 daLed May 7 2007
lnformlng LhaL lnLer alla Lhey and respondenL had forged an amlcable seLLlemenL
Cn !uly 2 2007 respondenL's counsel flled before Lhls CourL a CommenL and CpposlLlon (Lo
eLlLloners' ManlfesLaLlon of May 7 2007)14 lnLerposlng no ob[ecLlon Lo Lhe dlsmlssal of Lhe peLlLlon
buL ob[ecLlng Lo Lhe absoluLlon of peLlLloners from paylng respondenL Lhe LoLal amounL of llfLy
1housand uS uollars (uS$3000000) or approxlmaLely 230000000 Lhe amounL awarded by Lhe
nL8C he addlng LhaL
1here belng already a paymenL of 43000000 and lnvoklng Lhe docLrlne of parens paLrlae
we pray Lhen Lo Lhls Ponorable Supreme CourL LhaL Lhe sald amounL be deducLed from Lhe nL8C
[udgmenL award of uS$3000000 or approxlmaLely 230000000 and peLlLloners be furLhermore
ordered Lo pay ln favor of hereln respondenL Lhe remalnlng balance Lhereof

x x x x13 (Lmphasls ln Lhe orlglnal underscorlng supplled)

3 | a g e

8espondenL's counsel also flled before Lhls CourL purporLedly on behalf of respondenL a
CommenL16 on Lhe presenL peLlLlon
1he parLles havlng forged a compromlse agreemenL as respondenL ln facL has execuLed a
CulLclalm and 8elease Lhe CourL dlsmlsses Lhe peLlLlon
ArLlcle 227 of Lhe Labor Code provldes
Any compromlse seLLlemenL lncludlng Lhose lnvolvlng labor sLandard laws volunLarlly
agreed upon by Lhe parLles wlLh Lhe asslsLance of Lhe ueparLmenL of Labor shall be flnal and blndlng
upon Lhe parLles 1he naLlonal Labor 8elaLlons Commlsslon or any courL shall noL assume [urlsdlcLlon
over lssues lnvolved Lhereln excepL ln case of noncompllance Lhereof or lf Lhere ls prlma facle
evldence LhaL Lhe seLLlemenL was obLalned Lhrough fraud mlsrepresenLaLlon or coerclon (Lmphasls
and underscorlng supplled)
ln Claybar v nL8C17 Lhe CourL recognlzlng Lhe concluslveness of compromlse seLLlemenLs
as a means Lo end labor dlspuLes held LhaL ArLlcle 2037 of Lhe Clvll Code whlch provldes LhaL a
compromlse has upon Lhe parLles Lhe effecL and auLhorlLy of res [udlcaLa applles suppleLorlly Lo labor
cases even lf Lhe compromlse ls noL [udlclally approved18
1haL respondenL was noL asslsLed by hls counsel when he enLered lnLo Lhe compromlse does
noL render lL null and vold LuroLech Palr SysLems lnc v Co19 so enllghLens
A compromlse agreemenL ls valld as long as Lhe conslderaLlon ls reasonable and Lhe
employee slgned Lhe walver volunLarlly wlLh a full undersLandlng of whaL he was enLerlng lnLo All LhaL
ls requlred for Lhe compromlse Lo be deemed volunLarlly enLered lnLo ls personal and speclflc
lndlvldual consenL 1hus conLrary Lo respondenL's conLenLlon Lhe employee's counsel need noL be
presenL aL Lhe Llme of Lhe slgnlng of Lhe compromlse agreemenL20 (underscorlng supplled)
lL bears noLlng LhaL as reflecLed earller Lhe CulLclalm and Walver was subscrlbed and sworn
Lo before Lhe Labor ArblLer
8espondenL's counsel neverLheless argues LhaL Lhe amounL of lour Pundred llfLy
1housand esos (43000000) glven Lo respondenL on Aprll 4 2007 as 'full and flnal seLLlemenL of
[udgmenL award' ls unconsclonably low and unChrlsLlan Lo say Lhe leasL21 Cnly respondenL
however can lmpugn Lhe conslderaLlon of Lhe compromlse as belng unconsclonable
1he relaLlon of aLLorney and cllenL ls ln many respecLs one of agency and Lhe general rules
of agency apply Lo such relaLlon22 1he acLs of an agenL are deemed Lhe acLs of Lhe prlnclpal only lf Lhe
agenL acLs wlLhln Lhe scope of hls auLhorlLy23 1he clrcumsLances of Lhls case lndlcaLe LhaL
respondenL's counsel ls acLlng beyond Lhe scope of hls auLhorlLy ln quesLlonlng Lhe compromlse
agreemenL
1haL a cllenL has undoubLedly Lhe rlghL Lo compromlse a sulL wlLhouL Lhe lnLervenLlon of hls
lawyer24 cannoL be galnsald Lhe only quallflcaLlon belng LhaL lf such compromlse ls enLered lnLo wlLh
Lhe lnLenL of defraudlng Lhe lawyer of Lhe fees [usLly due hlm Lhe compromlse musL be sub[ecL Lo Lhe
sald fees23 ln Lhe case aL bar Lhere ls no showlng LhaL respondenL lnLended Lo defraud hls counsel of
hls fees ln facL Lhe CulLclalm and 8elease Lhe execuLlon of whlch was wlLnessed by peLlLloner !hll's
presldenL Lulallo C Candava and one AnLonlo C Caslm noLes LhaL Lhe 20 aLLorney's fees would be
pald 12 Aprll 2007 90000

WPL8LlC8L Lhe peLlLlon ls ln llghL of all Lhe foregolng dlscusslon ulSMlSSLu



Gk No L2476S August 29 1969
nILIINL NA1ICNAL 8ANk p|a|nt|ffappe||ee
vs
MAkIMC S1A MAkIA L1 AL defendant

1LLPAnkLL !

ln Lhls appeal cerLlfled Lo Lhls CourL by Lhe CourL of Appeals as lnvolvlng purely legal lssues we
hold LhaL a speclal power of aLLorney Lo morLgage real esLaLe ls llmlLed Lo such auLhorlLy Lo morLgage
and does noL blnd Lhe granLor personally Lo oLher obllgaLlons conLracLed by Lhe granLee ln Lhe
absence of any raLlflcaLlon or oLher slmllar acL LhaL would esLop Lhe granLor from quesLlonlng or
dlsownlng such oLher obllgaLlons conLracLed by Lhe granLee
lalnLlff bank flled Lhls acLlon on lebruary 10 1961 agalnsL defendanL Maxlmo SLa Marla and hls
slx broLhers and slsLers defendanLsappellanLs valerlana LmeLerla 1eofllo CulnLln 8osarlo and
Leonlla all surnamed SLa Marla and Lhe AssoclaLed lnsurance SureLy Co lnc as sureLy for Lhe
collecLlon of cerLaln amounLs represenLlng unpald balances on Lwo agrlculLural sugar crop loans due
allegedly from defendanLs 1
1he sald sugar crop loans were obLalned by defendanL Maxlmo SLa Marla from plalnLlff bank
under a speclal power of aLLorney execuLed ln hls favor by hls slx broLhers and slsLers defendanLs
appellanLs hereln Lo morLgage a 16odd hecLare parcel of land [olnLly owned by all of Lhem Lhe
perLlnenL porLlon of whlch reads as follows
1haL we vALL8lAnA LML1L8lA 1LCllLC Culn1ln 8CSA8lC and LLCnlLA all surnamed S1A
MA8lA sole helrs of our deceased parenLs CAnuluC S1A MA8lA and l8AnClSCA uL LCS 8L?LS all of
legal age llllplnos and resldenLs of ulnaluplhan 8aLaan do hereby name consLlLuLe and appolnL ur
MAxlMC S1A MA8lA of legal age marrled and resldlng aL ulnaluplhan 8aLaan Lo be our Lrue and
lawful aLLorney of and ln our place name and sLead Lo morLgage or convey as securlLy Lo any bank
company or Lo any naLural or [urldlcal person our undlvlded shares over a cerLaln parcel of land
LogeLher Lhe lmprovemenLs Lhereon whlch parcel of land ls more parLlcularly descrlbed as follows Lo
wlL
SlLuaLed ln Lhe 8arrlo of lnuloL MunlclpallLy of ulnaluplhan 8aLaan conLalnlng an area of
167249 hecLares and bounded as follows Lo wlL norLh by properLy of Ale[andro 8enlLo on Lhe
norLheasL by publlc land and properLy of 1omas 1ulop on Lhe souLheasL by properLy of 8amlndo
AgusLln on Lhe souLhwesL by properLles of !ose v 8eyes and Lmlllo 8eyes and on Lhe norLhwesL by
excluded porLlon clalmed by Lmlllo 8eyes
of whlch parcel of land aforemenLloned we are LogeLher wlLh our sald aLLorney who ls our
broLher Lhe owners ln equal undlvlded shares as evldenced by 1ransfer CerLlflcaLe of 1lLle no 12783
of Lhe 8eglsLry of ueeds of 8aLaan daLed leb 26Lh 1931 (Lxh L)2
ln addlLlon valerlana SLa Marla alone also execuLed ln favor of her broLher Maxlmo a speclal
power of aLLorney Lo borrow money and morLgage any real esLaLe owned by her granLlng hlm Lhe
followlng auLhorlLy
lor me and ln my name Lo borrow money and make execuLe slgn and dellver morLgages of real
esLaLe now owned by me sLandlng ln my name and Lo make execuLe slgn and dellver any and all
promlssory noLes necessary ln Lhe premlses (Lxh Ll)3

4 | a g e

8y vlrLue of Lhe Lwo above powers Maxlmo SLa Marla applled for Lwo separaLe crop loans for
Lhe 19321933 and 19331934 crop years wlLh plalnLlff bank one ln Lhe amounL of 1300000 of
whlch only Lhe sum of 1321611 was acLually exLended by plalnLlff and Lhe oLher ln Lhe amounL of
2300000 of whlch only Lhe sum of 1242737 was acLually exLended by plalnLlff As securlLy for Lhe
Lwo loans Maxlmo SLa Marla execuLed ln hls own name ln favor of plalnLlff bank Lwo chaLLel
morLgages on Lhe sLandlng crops guaranLeed by sureLy bonds for Lhe full auLhorlzed amounLs of Lhe
loans execuLed by Lhe AssoclaLed lnsurance SureLy Co lnc as sureLy wlLh Maxlmo SLa Marla as
prlnclpal 1he records of Lhe crop loan appllcaLlon furLher dlsclose LhaL among Lhe securlLles glven by
Maxlmo for Lhe loans were a 2nd morLgage on 233023 Pas of sugarland lncludlng sugar quoLa rlghLs
Lhereln lncludlng Lhe parcel of land [olnLly owned by Maxlmo and hls slx broLhers and slsLers hereln
for Lhe 19321933 crop loan wlLh Lhe noLaLlon LhaL Lhe bank already held a flrsL morLgage on Lhe same
properLles for Lhe 19311932 crop loan of Maxlmo 4 and a 3rd morLgage on Lhe same properLles for
Lhe 19331934 crop loan 3

1he Lrlal courL rendered [udgmenL ln favor of plalnLlff and agalnsL defendanLs Lhus1awphi1neL
WPL8LlC8L premlses consldered [udgmenL ls hereby rendered condemnlng Lhe defendanL
Maxlmo 8 SLa Marla and hls codefendanLs valerlana CulnLln 8osarlo LmeLerla 1eofllo and Leonlla
all surnamed SLa Marla and Lhe AssoclaLed lnsurance and SureLy Company lnc [olnLly and severally
Lo pay Lhe plalnLlff Lhe hlllpplne naLlonal 8ank uel Carmen 8ranch as follows

1 Cn Lhe flrsL cause of acLlon Lhe sum of 830072 wlLh a dally lnLeresL of 083 on 610000 aL 6
per annum beglnnlng AugusL 21 1963 unLll fully pald
2 Cn Lhe second cause of acLlon Lhe sum of 1429979 wlLh a dally lnLeresL of 133 on 934644 aL
6 per annum unLll fully pald and
3 Cn boLh causes of acLlon Lhe furLher sum equlvalenL Lo 10 of Lhe LoLal amounL due as aLLorneys
fee as of Lhe daLe of Lhe execuLlon of Lhls declslon and Lhe cosLs6
uefendanL Maxlmo SLa Marla and hls sureLy defendanL AssoclaLed lnsurance SureLy Co lnc
who dld noL reslsL Lhe acLlon dld noL appeal Lhe [udgmenL 1hls appeals been Laken by hls slx broLhers
and slsLers defendanLsappellanLs who relLeraLe ln Lhelr brlef Lhelr maln conLenLlon ln Lhelr answer Lo
Lhe complalnL LhaL under Lhls speclal power of aLLorney Lxh L Lhey had noL glven Lhelr broLher
Maxlmo Lhe auLhorlLy Lo borrow money buL only Lo morLgage Lhe real esLaLe [olnLly owned by Lhem
and LhaL lf Lhey are llable aL all Lhelr llablllLy should noL go beyond Lhe value of Lhe properLy whlch
Lhey had auLhorlzed Lo be glven as securlLy for Lhe loans obLalned by Maxlmo ln Lhelr answer
defendanLsappellanLs had furLher conLended LhaL Lhey dld noL beneflL whaLsoever from Lhe loans
and LhaL Lhe plalnLlff banks only recourse agalnsL Lhem ls Lo foreclose on Lhe properLy whlch Lhey had
auLhorlzed Maxlmo Lo morLgage
We flnd Lhe appeal of defendanLsappellanLs excepL for defendanL valerlana SLa Marla who had
execuLed anoLher speclal power of aLLorney Lxh L1 expressly auLhorlzlng Maxlmo Lo borrow money
on her behalf Lo be well Laken

1 lalnLlff bank has noL made ouL a cause of acLlon agalnsL defendanLsappellanLs (excepL valerlana)
so as Lo hold Lhem llable for Lhe unpald balances of Lhe loans obLalned by Maxlmo under Lhe chaLLel
morLgages execuLed by hlm ln hls own name alone ln Lhe early case of 8ank of l vs ue CosLer Lhls
CourL ln holdlng LhaL Lhe broad power of aLLorney glven by Lhe wlfe Lo Lhe husband Lo look afLer and
proLecL Lhe wlfes lnLeresLs and Lo LransacL her buslness dld noL auLhorlze hlm Lo make her llable as a
sureLy for Lhe paymenL of Lhe preexlsLlng debL of a Lhlrd person clLed Lhe fundamenLal consLrucLlon
rule LhaL where ln an lnsLrumenL powers and duLles are speclfled and deflned LhaL all of such powers
and duLles are llmlLed andconflned Lo Lhose whlch are speclfled and deflned and all oLher powers and
duLles are excluded 7 1hls ls buL ln accord wlLh Lhe dlslncllnaLlon of courLs Lo enlarge an auLhorlLy
granLed beyond Lhe powers expressly glven and Lhose whlch lncldenLally flow or derlve Lherefrom as
belng usual or reasonably necessary and proper for Lhe performance of such express powers Lven
before Lhe flllng of Lhe presenL acLlon Lhls CourL ln Lhe slmllar case of ue vllla vs labrlcanLe 8 had
already ruled LhaL where Lhe power of aLLorney glven Lo Lhe husband by Lhe wlfe was llmlLed Lo a granL
of auLhorlLy Lo morLgage a parcel of land LlLled ln Lhe wlfes name Lhe wlfe may noL be held llable for
Lhe paymenL of Lhe morLgage debL conLracLed by Lhe husband as Lhe auLhorlLy Lo morLgage does noL
carry wlLh lL Lhe auLhorlLy Lo conLracL obllgaLlon 1hls CourL Lhus held ln Lhe sald case
AppellanL clalms LhaL Lhe Lrlal courL erred ln holdlng LhaL only Cesarlo A labrlcanLe ls llable Lo
pay Lhe morLgage debL and noL hls wlfe who ls exempL from llablllLy 1he Lrlal courL sald Cnly Lhe
defendanL Cesarlo A labrlcanLe ls llable for Lhe paymenL of Lhls amounL because lL does noL appear
LhaL Lhe oLher defendanL Marla C de labrlcanLe had auLhorlzed Cesarlo A labrlcanLe Lo conLracL Lhe
debL also ln her name 1he power of aLLorney was noL presenLed and lL ls Lo be presumed LhaL Lhe
power (of aLLorney) was llmlLed Lo a granL of auLhorlLy Lo Cesarlo A labrlcanLe Lo morLgage Lhe parcel
of land covered by 1ransfer CerLlflcaLe of 1lLle ln Lhe name of Marla C de labrlcanLe
We wenL over Lhe conLenLs of Lhe deed of morLgage execuLed by Cesarlo labrlcanLe ln favor of
AppellanL on Aprll 18 1944 and Lhere ls really noLhlng Lhereln from whlch we may lnfer LhaL Cesarlo
was auLhorlzed by hls wlfe Lo consLrucL Lhe obllgaLlon ln her name 1he deed shows LhaL Lhe auLhorlLy
was llmlLed Lo Lhe execuLlon of Lhe morLgage lnsofar as Lhe properLy of Lhe wlfe ls concerned 1here ls
a dlfference beLween auLhorlLy Lo morLgage and auLhorlLy Lo conLracL obllgaLlon Slnce Lhe power of
aLLorney was noL presenLed as evldence Lhe Lrlal courL was correcL ln presumlng LhaL Lhe power was
merely llmlLed Lo a granL of auLhorlLy Lo morLgage unless Lhe conLrary ls shown9

2 1he auLhorlLy granLed by defendanLsappellanLs (excepL valerlana) unLo Lhelr broLher Maxlmo was
merely Lo morLgage Lhe properLy [olnLly owned by Lhem 1hey dld noL granL Maxlmo any auLhorlLy Lo
conLracL for any loans ln Lhelr names and behalf Maxlmo alone wlLh valerlana who auLhorlzed hlm Lo
borrow money musL answer for sald loans and Lhe oLher defendanLsappellanLs only llablllLy ls LhaL
Lhe real esLaLe auLhorlzed by Lhem Lo be morLgaged would be sub[ecL Lo foreclosure and sale Lo
respond for Lhe obllgaLlons conLracLed by Maxlmo 8uL Lhey cannoL be held personally llable for Lhe
paymenL of such obllgaLlons as erroneously held by Lhe Lrlal courL

3 1he facL LhaL Maxlmo presenLed Lo Lhe plalnLlff bank valerlanas addlLlonal speclal power of
aLLorney expressly auLhorlzlng hlm Lo borrow money Lxh L1 aslde from Lhe auLhorlLy Lo morLgage
execuLed by valerlana LogeLher wlLh Lhe oLher defendanLsappellanLs also ln Maxlmos favor lends
supporL Lo our vlew LhaL Lhe bank was noL saLlsfled wlLh Lhe auLhorlLy Lo morLgage alone lor
oLherwlse such auLhorlLy Lo borrow would have been deemed unnecessary and a surplusage And
havlng falled Lo requlre LhaL Maxlmo submlL a slmllar auLhorlLy Lo borrow from Lhe oLher defendanLs
appellanLs plalnLlff whlch apparenLly was saLlsfled wlLh Lhe sureLy bond for repaymenL puL up by
Maxlmo cannoL now seek Lo hold sald defendanLsappellanLs slmllarly llable for Lhe unpald loans
lalnLlffs argumenL LhaL a morLgage ls slmply an accessory conLracL and LhaL Lo effecL Lhe morLgage
a loan has Lo be secured 10 falls far shorL of Lhe mark Maxlmo had lndeed secured Lhe loan on hls
own accounL and Lhe defendanLsappellanLs had auLhorlzed hlm Lo morLgage Lhelr respecLlve
3 | a g e

undlvlded shares of Lhe real properLy [olnLly owned by Lhem as securlLy for Lhe loan 8uL LhaL was Lhe
exLenL of Lhelr auLhorlLy land consequenL llablllLy Lo have Lhe real properLy answer for Lhe loan ln case
of nonpaymenL lL ls noL unusual ln famlly and buslness clrcles LhaL one would allow hls properLy or an
undlvlded share ln real esLaLe Lo be morLgaged by anoLher as securlLy elLher as an accommodaLlon or
for valuable conslderaLlon buL Lhe granL of such auLhorlLy does noL exLend Lo assumlng personal
llablllLy much less solldary llablllLy for any loan secured by Lhe granLee ln Lhe absence of express
auLhorlLy so glven by Lhe granLor

4 1he ouLcome mlghL be dlfferenL lf Lhere had been an express raLlflcaLlon of Lhe loans by defendanLs
appellanLs or lf lL had been shown LhaL Lhey had been beneflLed by Lhe crop loans so as Lo puL Lhem ln
esLoppel 8uL Lhe burden of esLabllshlng such raLlflcaLlon or esLoppel falls squarely upon plalnLlff bank
lL has noL only falled Lo dlscharge Lhls burden buL Lhe record sLands undlspuLed LhaL defendanL
appellanL CulnLln SLa Marla LesLlfled LhaL he and hls codefendanLs execuLed Lhe auLhorlLy Lo
morLgage Lo accommodaLe (my) broLher ur Maxlmo SLa Marla and because he ls my broLher l
slgned lL Lo accommodaLe hlm as securlLy for whaLever he may apply as loan Cnly for LhaL land we
gave hlm as securlLy and LhaL we broLhers dld noL recelve any cenLavo as beneflL 11 1he record
furLher shows plalnLlff bank lLself admlLLed durlng Lhe Lrlal LhaL defendanLsappellanLs dld noL proflL
from Lhe loan and LhaL Lhey dld noL recelve any money (Lhe loan proceeds) from (Maxlmo) 12 no
esLoppel Lherefore can be clalmed by plalnLlff as agalnsL defendanLsappellanLs

3 now as Lo Lhe exLenL of defendanL valerlana SLa Marlas llablllLy Lo plalnLlff As already sLaLed
above valerlana sLands llable noL merely on Lhe morLgage of her share ln Lhe properLy buL also for
Lhe loans whlch Maxlmo had obLalned from plalnLlff bank slnce she had expressly granLed Maxlmo Lhe
auLhorlLy Lo lncur such loans (Lxh L1) AlLhough Lhe quesLlon has noL been ralsed ln appellanLs brlef
we hold LhaL valerlanas llablllLy for Lhe loans secured by Maxlmo ls noL [olnL and several or solldary as
ad[udged by Lhe Lrlal courL buL only [olnL pursuanL Lo Lhe provlslons of ArLlcle 1207 of Lhe Clvll Code
LhaL Lhe concurrence of Lwo or more debLors ln one and Lhe same obllgaLlon does noL lmply LhaL
each one of Lhe (debLors) ls bound Lo render enLlre compllance wlLh Lhe presLaLlon 1here ls a solldary
llablllLy only when Lhe obllgaLlon expressly so sLaLes or when Lhe law or Lhe naLure of Lhe obllgaLlon
requlres solldarlLy lL should be noLed LhaL ln Lhe addlLlonal speclal power of aLLorney Lxh L1
execuLed by valerlana she dld noL granL Maxlmo Lhe auLhorlLy Lo blnd her solldarlLy wlLh hlm on any
loans he mlghL secure Lhereunder

6 llnally as Lo Lhe 10 award of aLLorneys fees Lhls CourL belleves LhaL conslderlng Lhe resources of
plalnLlff bank and Lhe facL LhaL Lhe prlnclpal debLor Maxlmo SLa Marla had noL conLesLed Lhe sulL an
award of flve (3) per cenL of Lhe balance due on Lhe prlnclpal excluslve of lnLeresLs le a balance of
610000 on Lhe flrsL cause of acLlon and a balance of 934644 on Lhe second cause of acLlon per
Lhe banks sLaLemenLs of AugusL 20 1963 (Lxhs C1 and 881 respecLlvely) should be sufflclenL

WPL8LlC8L Lhe [udgmenL of Lhe Lrlal courL agalnsL defendanLsappellanLs LmeLerla 1eofllo
CulnLln 8osarlo and Leonlla all surnamed SLa Marla ls hereby reversed and seL aslde wlLh cosLs ln
boLh lnsLances agalnsL plalnLlff 1he [udgmenL agalnsL defendanLappellanL valerlana SLa Marla ls
modlfled ln LhaL her llablllLy ls held Lo be [olnL and noL solldary and Lhe award of aLLorneys fees ls
reduced as seL forLh ln Lhe precedlng paragraph wlLhouL cosLs ln Lhls lnsLance

Gk No L27134 Iebruary 28 1986
CCMANIA MAkI1IMA p|a|nt|ffappe||ant
vs
ICSL C LIMSCN defendantappe||ant

A1A!C !

1hls an appeal from a declslon of Lhe CourL of llrsL lnsLance of Manlla 1 holdlng plalnLlff Companla
MarlLlma llable Lo defendanL ln Lhe amounL of 44133901 represenLlng Lhe dlfference beLween Lhe
clalm of plalnLlff for unpald passage and frelghL charges for shlpmenLs of hogs and caLLle on plalnLlffs
vessels for Lhe perlod from CcLober 1937 Lo lebruary 1961 and Lhe clalm of defendanL for Lhe
purchase prlce of foodsLuffs sold by defendanL Lo plalnLlff paymenLs on accounL of frelghL noL
accounLed for by plalnLlff and rebaLe Lo whlch defendanL was enLlLled on Lhe aforesald frelghL charges

Cn CcLober 8 1962 plalnLlff Companla MarlLlma flled a complalnL agalnsL defendanL !ose C Llmson
for collecLlon of Lhe sum of 4470134 represenLlng Lhe balance of defendanLs unpald accounLs for
passage and frelghL on shlpmenLs of hogs caLLle and carabaos abroad plalnLlffs vessel from varlous
porLs of vlsayas and Mlndanao for Lhe perlod from CcLober 1937 Lo lebruary 1961 ALLached Lo sald
complalnL was Lhe sLaLemenL of accounL supporLlng plalnLlffs clalm for unpald passage and frelghL
uefendanL flled a moLlon for blll of parLlculars asklng LhaL plalnLlff aLLach Lo Lhe complalnL Lhe blns of
ladlng referred Lo ln sald sLaLemenL of accounL ln order Lo enable defendanL Lo answer plalnLlffs
complalnL lalnLlff opposed sald moLlon 1he CourL however ordered plalnLlff Lo aLLach phoLosLaL
coples of Lhe bllls of ladlng upon whlch Lhe sLaLemenL of accounL was based lalnLlffs moLlon for
reconslderaLlon of sald order was denled by Lhe CourL buL upon moLlon of plalnLlff sald order was
modlfled Lo allow plalnLlff Lo aLLach dupllcaLe orlglnals of Lhe bllls of ladlng lnsLead of phoLosLaL coples
Lhereof

Cn !uly 16 1963 defendanL flled hls answer Lo Lhe complalnL denylng any llablllLy Lo plalnLlff
uefendanL alleged LhaL he had already fully pald for all Lhe shlpmenLs he made and LhaL a number of
Lhe bllls of ladlng submlLLed by plalnLlff as basls of lLs clalm are noL properly chargeable Lo defendanL
slnce he was noL Lhe shlpper nor had he auLhorlzed sald shlpmenLs whlch were made by parLles oLher
Lhan Lhose for whom defendanL ls llable or who had been duly auLhorlzed by defendanL Lo make sald
shlpmenLs uefendanL furLher seL up a counLerclalm for Lhe refund of Lhe rebaLe Lo whlch he was
enLlLled Lo pursuanL Lo an agreemenL LhaL he had wlLh plalnLlff for shlpmenLs made by hlm from
uavao CoLabaLo uadlangas lllgan and MasbaLe and for cosL of foodsLuffs sold or dellvered Lo plalnLlff
ln Lhe LoLal amounL of 41147743

Slnce Lhe case lnvolved prlmarlly quesLlons of accounLlng upon moLlon of plalnLlff wlLhouL Lhe
opposlLlon of defendanL Lhe CourL appolnLed a commlssloner Lo examlne Lhe accounLs lnvolved
before Lhe CourL proceed wlLh Lhe hearlng of Lhe case Anselmo 1 del 8osarlo a cerLlfled publlc
accounLanL was Lhus appolnLed by Lhe CourL

Cn CcLober 29 1963 Mr del 8osarlo submlLLed hls reporL Lo Lhe CourL 1he sallenL polnLs ln sald
reporL showed LhaL wlLh respecL Lo Lhe clalm of defendanL agalnsL plalnLlff Lhe same was ln Lhe LoLal
amounL of 67641603 broken down as follows
6 | a g e


lor purchases of foodsLuffs 43323773
lrelghL ad[usLmenLs 817043
Cash paymenLs made by defendanL 23300783
67641603

Cn Lhe oLher hand Lhe clalm of Lhe plalnLlff LoLalled 34339424 based on 1321 bllls of ladlng
examlned by hlm of whlch 267 were slgned by defendanL LoLallng 6706166 3 bllls slgned by
represenLaLlve of defendanL LoLallng l14810 91 bllls slgned by a cerLaln erry wlLh !ose Llmson
Lhe defendanL as shlpper and conslgnee LoLallng 6198100 149 bllls slgned by sald erry for oLhers
as shlppers and conslgnee LoLallng 4686960 16 bllls slgned by oLhers LoLallng 318070 662 bllls
unslgned LoLallng 26017023 and 333 bllls mlsslng LoLallng 10298246 Accordlng Lo Lhe
Commlssloner defendanL can be held llable only for Lhe 267 bllls slgned by hlm and Lhe 3 bllls slgned by
hls represenLaLlve ln Lhe LoLal amounL of 6820979

1he bllls examlned by Lhe Commlssloner had been classlfled and regrouped by hlm lnLo (1) orlglnal bllls
of ladlng slgned by defendanL or hls agenL (2) orlglnal bllls of ladlng wlLhouL slgnaLure of defendanL or
hls agenL and (3) charges wlLh no orlglnal bllls of ladlng Lo wlL

(1) Crlglnal bllls of ladlng duly slgned by
defendanL or hls agenL 6820976
(2) Crlglnal bllls of ladlng wlLhouL
Lhe slgnaLure of defendanL 31031721
(3) no orlglnal bllls of ladlng 16686728

Sald Commlssloner recommended LhaL only Lhe amounL of 6820976 supporLed by orlglnal bllls of
ladlng slgned by defendanL or hls agenL ls properly chargeable Lo defendanL

AfLer hearlng Lhe lower CourL rendered [udgmenL based prlnclpally on Lhe reporL of Lhe Commlssloner
1he CourL however held LhaL defendanL was llable for Lhe bllls of ladlng wlLhouL orlglnals lnvolvlng a
LoLal of 16686726 buL llable on Lhe bllls of ladlng whlch had noL been slgned by hlm or hls
auLhorlzed represenLaLlve 1he CourL susLalned defendanLs clalm LhaL erry was noL hls auLhorlzed
represenLaLlve 1hus Lhe lower CourL rendered [udgmenL senLenclng plalnLlff Lo pay defendanL Lhe sum
of 44133901 wlLh lnLeresL Lhereon aL Lhe legal raLe from Lhe daLe of Lhe flllng of Lhe counLerclalm
plus 300000 as aLLorneys fees 1he amounL of 44133901 ls compuLed as follows

AmounL Lo defendanL
lrelghL ad[usLmenLs 817043
Cash paymenLs 23300783
loodsLuffs and supplles dellvered 43323773

1oLal 67641603

ueducL amounL Lo plalnLlff on bllls of ladlng slgned by defendanL or hls auLhorlzed
represenLaLlve 6820976

8llls of ladlng wlLhouL orlglnals buL supporLed by oLher coples of sald bllls of ladlng
16686728

1oLal 23307704

8alance due defendanL44133901

lrom sald declslon boLh plalnLlff and defendanL appealed Lo Lhls CourL plalnLlff asslgnlng slx
asslgnmenL of errors Lo wlL

l
1he 1rlal CourL erred ln flndlng LhaL Lhe reporL of Lhe Commlssloner ls fully supporLed by Lhe
documenLary evldence presenLed ln Lhls case
ll
1he 1rlal CourL erred ln concurrlng wlLh Lhe Commlssloner LhaL wlLhouL Lhe supporLlng orlglnal
documenLs Lhe cusLomers subsldlary ledger cards are noL sufflclenL and rellable
lll
1he 1rlal CourL erred ln holdlng LhaL Lhe Commlssloner ls rlghL ln dlsallowlng bllls of ladlng noL slgned
elLher by defendanL or hls auLhorlzed represenLaLlves lnsLead of holdlng LhaL Lhe correspondlng
frelghL charges for sald bllls of ladlng were probably deblLed ln defendanLs charge accounL
lv
1he 1rlal CourL erred ln flndlng LhaL Lhe facL LhaL no perlodlc sLaLemenLs of accounL furnlshed Llmson
was kepL ln Lhe dark as Lo Lhe Lrue sLaLus of hls accounL wlLh plalnLlff

v
1he 1rlal CourL erred ln flndlng LhaL Lhere ls a balance of 44133901 due Lhe defendanL sald sum
wlLh lnLeresL Lhereon from Lhe daLe of Lhe flllng of Lhe counLerclalm plus 300000 as aLLorneys fees
and cosLs
vl
1he 1rlal CourL erred ln dlsmlsslng Lhe complalnL and ln noL senLenclng Lhe defendanL Lo pay Lhe
plalnLlff Lhe sum of 4470134 represenLlng Lhe unpald balance of defendanLs charge accounL wlLh
plalnLlff plus legal lnLeresL Lhereon from Lhe flllng of Lhe complalnL and Lhe sum of 200000 and
l00000 as aLLomeys fees and expenses of llLlgaLlng respecLlvely lncurred by Lhe plalnLlff

whlle defendanL asslgned one sole asslgnmenL of error

l
1he 1rlal CourL erred ln declarlng appellanL Llmson llable ln Lhe amounL of 16686728 for frelghLers
and ln deducLlng Lhe same from hls clalm agalnsL MarlLlma

We flnd LhaL Lhe CourL a quo erred ln re[ecLlng Lhe blns of ladlng slgned by erry where defendanL
appeared shlpper or conslgnee Lhose slgned by erry where persons oLher Lhan defendanL
appellanL as shlpper and Lhe bllls of ladlng unslgned by defendanL

7 | a g e

WlLh regards Lo Lhe 91 conLroverLed bllls of ladlng slgned by erry wlLh Llmson as shlpper or
conslgnee ln Lhe LoLal amounL of 6198130 wlLness Cabllng LesLlfled LhaL Lhe slgnaLures Lhereln are
Lhose of Clprlano MagLlbay allas erry who Look dellvery of Lhe cargoes sLaLed Lhereln afLer slgnlng
Lhe dellvery recelpLs Pe LesLlfled Lhus

1hese are all Lhe slgnaLures of erry l know lL Lo be hls because ofLenLlmes he goes Lhere Lo geL Lhe
dellver y orders and he slgned as erry ln my presence Pls real name ls Clprlano MagLlbay l allowed
dellvery of Lhe Cargoes Lo hlm because he was Lhe regular represenLaLlve of Mr Llmson (Lsn pp
1213 nov 19 1964)

Cn Lhe oLher hand nolasco Cruz llagan dellvery order clerk of Companla MarlLlma LesLlfled Lo Lhls
wlse

ln lssulng Lhese dellvery orders l geL Lhe daLa from Lhe manlfesLs or from Lhe bllls of ladlng l know Lhe
defendanL Llmson ln Lhls case Pe ls now ln Lhe CourL room l knew hlm slnce Lhe mlddle of 1936 up Lo
1961 when l was asslgned ln Lhe 1ermlnal Cfflce of MarlLlma l came Lo know hlm because Mr Cabllng
lnLroduced Lo us LhaL he ls a regular shlpper of hogs caLLles carabaos comlng from Lhe souLhern porLs
As a clerk l prepared Lhe dellvery orders for Lhese cargoes Lo be dellvered Lo Mr Llmson or hls
auLhorlzed represenLaLlves l wlll menLlon some of hls represenLaLlves lor hog Lhe auLhorlzed
represenLaLlve ls Clprlano MagLlbay or erry and for caLLles carabaos and cows ls Lye Marlo Mr
Marcellno 1lnoco and oLhers whom l donL remember Lhe names When Lhese represenLaLlves of Mr
Llmson Lake dellvery of Lhe shlpmenLs l leL Lhem slgn Lhe dellvery orders l prepared Lhe dellvery
orders as soon as Mr Llmson hlmself or hls auLhorlzed represenLaLlve go Lo our offlce and presenL Lhe
bllls of ladlng ln case where Lhere ls no orlglnal blll of ladlng dellvery order ls effecLed also only when
auLhorlzed by Mr Cabllng baslng on Lhe manlfesLs 1he boaL glves us Lhe manlfesL as soon as lL arrlves
(Lsn 233236 Mar 10/63 236260 Mar 10/63 Lven Lhough Lhe name of Lhe shlpper ls noL Mr
Llmson or Lhe conslgnee ls noL Mr Llmson l prepared dellvery orders by auLhorlzaLlon of Mr Cabllng
(pp 260261 ld) 1he auLhorlzed represenLaLlve Lo recelve for hogs was Mr Clprlano MagLlbay allas
erry Pe slgns Lhe dellvery orders by Lhe name of erry (p 261 ld)

We were also Lhe ones who puL on Lhe dellvery orders Lhe sLaLemenL accounL Llmson We puL LhaL Lo
lndlcaLe Lhe cargo ls chargeable Lo Mr Llmson so LhaL Lhe accounLlng deparLmenL would know LhaL
Lhe shlpmenL ls chargeable Lo Mr Llmson (pp 263263 ld)

l am famlllar wlLh Lhe slgnaLure of erry ln Lhese Lwo bunches of dellvery orders l flnd LhaL Lhe
slgnaLure appearlng Lhereln ls LhaL of erry Lhe auLhorlzed represenLaLlve of Llmson 1hese dellvery
orders were slgned by erry ln my presence l know LhaL Mr erry or MagLlbay ls Lhe auLhorlzed
represenLaLlve of Mr Llmson because he was lnLroduced Lo us by Llmson hlmself LhaL he ls Lhe one
auLhorlzed by hlm Lo geL hls cargoes Pe was auLhorlzed only Lo slgn dellvery orders for hogs l also
knew LhaL 1lnoco Lye Marlo and oLher were also auLhorlzed by Llmson Lo recelve shlpmenL for hlm
(pp 263270 ld) 1hese oLher persons who were auLhorlzed represenLaLlves Lo recelve blg caLLles
slgned dellvery orders ln my presence 1he dellvery orders were requesLed by Lye Marlo and 1lnoco
Lhe auLhorlzed represenLaLlves l know personally LhaL Lhese men are Lhe auLhorlzed represenLaLlves
for Llmson (pp 270273 ld) (lalnLlffs brlef pp 3337)

8egardlng Lhe 16 conLroverLed bllls of ladlng slgned by persons oLher Lhan erry wlLh frelghL charges
LoLalllng 318070 llagan LesLlfled LhaL Lhe represenLaLlves LhaL slgned Lhe dellvery recelpLs and Look
dellvery of Lhe cargoes Lhereof were Llmsons agenLs llagan LesLlfled Lhus

As clerk l prepared Lhe dellvery orders for Lhose cargoes Lo be dellvered Lo Mr Llmson or hls
auLhorlzed represenLaLlves lor hogs Lhe auLhorlzed represenLaLlve was Clprlano MagLlbay and for
caLLle carabaos and cows Lhe auLhorlzed represenLaLlves were Lye Marlo 1lnoco and oLhers who l
cannoL recall Lhe names (Lsn pp 260261 nov 1/63)

1hese oLher persons who were auLhorlzed represenLaLlves Lo recelve caLLle slgned dellvery recelpLs ln
my presence 1he dellvery orders were requesLed by Lye Marlo and 1lnoco Lhe auLhorlzed
represenLaLlves l know personally LhaL Lhese men are Lhe auLhorlzed represenLaLlve for Llmson (pp
27273 ld) (Lmphasls supplled)

WlLh respecL Lo Lhe 662 unslgned bllls of ladlng wlLh frelghL charges LoLallng 26017023 dellvery
recelpLs were lssued upon dellvery of Lhe shlpmenLs Cabllng and llagan who were presenLed Lhe
plalnLlff as wlLnesses LesLlfled LhaL Lhe ordlnary procedure aL plalnLlffs Lermlnal offlce was Lo requlre
Lhe surrender of Lhe orlglnal blll of ladlng buL when Lhe blll of ladlng cannoL be surrendered because lL
had noL arrlved or recelved by Lhe conslgnee or asslgnee Lhe dellvery of Lhe cargo was auLhorlzed [usL
Lhe same and Lhe dellvery recelpL was prepared based on Lhe shlps cargo manlfesLs or shlps copy of
Lhe blll of ladlng 1hls accommodaLlon was speclally glven Llmson because defendanL was a regular
shlpper and shlp chandler of plalnLlff and was a compadre of Cabllng 8esldes sald hogs and caLLle had
Lo be unloaded and released from Lhe pler for Lhey cannoL be kepL Lhere long afLer havlng been on
board for several days because Lhey mlghL dle (Lsn pp 320323 March 10 1963)

8egardlng Lhe 149 conLroverLed bllls of ladlng ln Lhe name of oLher persons as shlppers or conslgnees
and slgned by erry ln Lhe LoLal amounL of 4686960 lL was esLabllshed LhaL sald bllls of ladlng were
for caLLle and hogspurchased by Lhe defendanL from hls vla[eros ln Manlla whlch were dellvered Lo
and recelved by defendanL and for whlch he had Lo pay Lhe frelghL charges where ln Lurn he
deducLed from Lhe purchase prlce Lhe correspondlng cosL of frelghL or were for caLLle or hogs LhaL
belonged Lo Marcellno 1lnoco from whom defendanL had made arrangemenLs for paylng Lhe purchase
prlce of sald 1lnocos cargo parLly wlLh Lhe frelghL cosLs for whlch defendanL agreed Lo be deblLed ln
hls charge accounL wlLh MarlLlma 1hese facLs were admlLLed by Lhe defendanL hlmself when he
LesLlfled on dlrecL and crossexamlnaLlon supra 1hls was also conflrmed by Lhe LesLlmony of Cabllng
And now corroboraLlng Lhe above facLs as LesLlfled agkallnawan anoLher wlLness for Lhe plalnLlff
LesLlfled Lhus

l know Mr Llmson Pe ls also a meaL dealer As shlps chandler he supplles foodsLuffs meaL Lo
MarlLlma shlps l came Lo know Mr Llmson when Mr 1lnoco lnLroduced me Lo hlm Mr Llmson was
geLLlng meaL from Mr 1lnoco aL LhaL Llme lL was cow and carabao meaL 1hese cow and carabao meaL
whlch Mr Llmson used Lo geL from 1lnoco came from Lhe vlsayas Lo Manlla 1hey were broughL by Lhe
MarlLlma shlps and Lhose were Lhe cows and carabaos LhaL l Look dellvery aL LhaL Llme l do noL pay Lhe
frelghL for Lhe dellvery of Lhese cows and carabaos l was allowed by Lhe Companla MarlLlma Lo Lake
dellvery of Lhese cows and carabaos of Mr 1lnoco wlLhouL paylng Lhe frelghL because Lhe frelghLs wln
be charged Lo Mr Llmson 1hese frelghL charges LhaL l dld noL pay for Lhe shlpmenL of cows and
8 | a g e

carabaos of Mr 1lnoco were charged agalnsL Mr Llmson 1hese frelghL charges LhaL were charged
agalnsL Mr Llmson ln hls accounL ln Lhe MarlLlma were credlLed as paymenL of Mr Llmson Lo Lhe meaL
LhaL he geLs from Mr 1lnoco (Lsn pp 614 Aprll 20 1966) l am noL Lhe only one who recelved Lhe
cows and carabaos of Mr 1lnoco aL Lhe MarlLlma 1here were many more Marlo valencla 8emy and
one whom l know only as 8en negro (Lsn pp 1413 Aprll 30 1966) SomeLlmes Marcellno 1lnoco
hlmself Lakes Lhe cargo l used Lo accompany hlm and l am Lhe one slgnlng Lhe dellvery permlL
SomeLlmes he does Loo Pe does noL pay Lhe frelghL because lL ls charged agalnsL Lhe accounL of Mr
Llmson (Lsn pp 1320 Aprll 20 1966) l have occaslons Laklng dellvery of Lhe cows and carabaos of
Mr 1lnoco even lf Lhere was no orlglnal blll of ladlng and Lhe frelghL of whlch were charged agalnsL Mr
Llmson 1he offlce makes Lrue coples of Lhe bllls of ladlng for Lhe orlglnals whlch could noL be
produced !usL Lhe same l could Lake dellvery of Lhe sald cows and carabaos (Lsn pp 2021 ld)

ln all occaslons LhaL l wlLhdrew Lhe cows and carabaos of Mr 1lnoco for whlch l slgned Lhe dellvery
recelpLs Lhere were correspondlng orlglnal bllls of ladlng or coples of Lhe bllls of ladlng whlch were
made even lf Lhe orlglnal bllls could noL be produced (Lsn pp 23 May 6 1966) Mr Llmson slgned
Lhese bllls of ladlng LhaL l have presenLed Lo hlm 1hose LhaL were noL l was Lhe one who slgned lL
When Lhe unloadlng Lakes place aL nlghLs l [usL call hlm up by Lelephone (Lsn p 3 ld)

lor Lhe shlpmenLs of Mr Marcellno 1lnoco l was Lhe one who geLs Lhe dellvery order 8uL lf l am noL
around my companlons geL Lhem Powever lf he ls Lhere aL Lhe pler he hlmself recelves hls
shlpmenLs (Lsn pp 911 ld) All shlpmenLs of Mr 1lnoco are vales of Mr Llmson lf l do noL have Lhe
bllls of ladlng LhaL were slgned by Mr Llmson l can sLlll geL Lhe dellvery ln Lhls manner lf Lhe
shlpmenLs Lakes place aL nlghL and l could noL geL Lhe slgnaLure of Mr Llmson l slmply call hlm up Lhru
Lhe Lelephone who ln Lurn dlrecLs me Lo call on Mr Cabllng and Mr Cabllng used Lo Lell me Lo slgn Lhe
bllls of ladlng because he and Mr Llmson had already an arrangemenL (Lsn pp 1718 ld)

lalnLlff also presenLed LxhlblLs 8276 Lo 1018 ln Lhe LoLal amounL of 8146292 bllls of ladlng noL ln
Lhe name of defendanL Llmson buL whlch Llmson hlmself slgned Lhereby provlng LhaL defendanL Look
dellvery of shlpmenLs ln Lhe names of oLhers shlpper or conslgnee and whlch Lhe correspondlng
charges were deblLed Lo hls accounL

1he slmpler way Lo deLermlne how much ls Lhe LoLal clalm of plalnLlff agalnsL defendanL ls Lo compuLe
Lhe amounL of Lhe frelghL on Lhe face of Lhe bllls of ladlng supporLlng Lhe sLaLemenL of accounL
aLLached Lo Lhe complalnL and deducLlng Lherefrom Lhe rebaLes Lo whlch defendanL ls enLlLled Lo
under Lhe speclal arrangemenL made beLween defendanL and Mr l! Caray of Companla MarlLlma
daLed March 27 1937 Accordlng Lo Lhe sLaLemenL of accounL submlLLed by plalnLlff and aLLached Lo
Lhe complalnL Lhe LoLal of frelghL charges due from defendanL ls 69813914 (Annex A ComplalnL)

1hls ls Lhe amounL due based on whaL ls charged ln Lhe bllls of ladlng lL dld noL reflecL Lhe rebaLes
because sald bllls of ladlng were prepared ln Lhe fleld offlces of plalnLlff where Lhe speclal arrangemenL
enLlLllng defendanL Lo rebaLe had noL been LransmlLLed

Accordlng Lo Lhe reporL of Lhe Commlssloner Lhe LoLal rebaLe Lo whlch defendanL wlll be enLlLled Lo ls
12741889 (SupplemenLary 8eporL daLed !anuary 27 1964 LxhlblL 78) Accordlng Lo sald
Commlssloner he arrlved aL such amounL ln Lhe followlng manner

l selecLed Lhe frelghLage from uavao comprlsed of 340 shlpmenLs from CcLober 13 1937 up Lo
lebruary 11 1961 340 shlpmenLs and l used 430 as Lhe frelghLage from uavao Lo Manlla now l
used Lhe 300 as you requesLed and LhaL ls Lhe dlfference

ln oLher words Lhe Commlssloner summed up Lhe LoLal number of hogs lnvolved ln Lhe 340 shlpmenLs
from uavao whlch musL be some 30692 hogs 1he dlfference was arrlved aL Lhus

30692 hogs mulLlplled by 300 per head 23346000
less 30692 hogs mulLlplled by 430 per head 22811400 2334600

1he dlfference (2334600) subLracLed from Lhe orlglnal compuLaLlon of 13276489 resulLed Lo Lhe
reduced rebaLe of 12741889 (SupplemenLary 8eporL supra)

Powever lnsLead of merely verlfylng Lhe accuracy of Lhe abovesLaLed compuLaLlon Lhe speclal raLes
supra accorded Llmson was lndlvldually applled ln compuLlng Lhe frelghLage due from Llmsons
shlpmenLs as lLemlzed ln Lhe Spread of Charges made Lo Llmsons accounL (Commlssloners reporL
Lxh 7 ) and arrlved aL Lhe followlng

1oLal frelghL charges (speclal
raLes used for shlpmenLs from
porLs as provlded for ln Lhe
AgreemenL) 31784230
1oLal frelghL charges (Llmsons
shlpmenLs (raLes used as com
puLed ln porL of orlgln) from
porLs oLher Lhan Lhose sLaLed
ln Lhe AgreemenL 6902366
1oLal charges Lo Llmsons
AccounL 38686796

ln oLher words Lhe LoLal frelghL overcharges whlch may be due Llmson ls (69813914 less
38686796) 11129118 and noL 12741891 as reporLed by Lhe Commlssloner

1o be added Lo sald rebaLe of 11129118 are Lhe cash paymenL made by defendanL of 23300783
frelghL ad[usLmenL of l13843 and cosL of foodsLuffs purchased by plalnLlff from defendanL of
41198233 (from Lhe LoLal of 43323773 represenLlng Lhe amounL of sald purchase deducL
2123340 whlch had been bllled Lwlce) all of whlch would LoLal 73941983 ueducLlng from sald
amounL Lhe LoLal of frelghL charges ln favor of plalnLlff as per Lhe sLaLemenL of accounL aLLached as
Annex A Lo Lhe complalnL of 69813914 would glve a balance of 6126069 ln favor of defendanL

lL may be noLed LhaL ln hls answer Lo Lhe complalnL defendanL sLaLed LhaL Lhe LoLal of hls clalm agalnsL
plalnLlff for Lhe cosL of foodsLuffs dellvered ls 41147743 (par 22 Answer of uefendanL page 68
8ecord on Appeal)

9 | a g e

now Lurnlng Lo defendanLs sole asslgnmenL of error namely LhaL Lhe 1rlal CourL erred ln declarlng
defendanL llable ln Lhe amounL of 16686720 represenLlng Lhe amounL covered by bllls of ladlng
where Lhe orlglnals had been presenLed

WlLh respecL Lo defendanLs sole asslgnmenL of errors namely LhaL CourL a quo erred ln declarlng
defendanL llable ln Lhe amounL of 16686728 whlch represenLs charges for frelghL where Lhe
orlglnals of Lhe bllls of ladlng were noL submlLLed We flnd merlL ln Lhe conLenLlon of plalnLlff LhaL Lhe
respondenL CourL correcLly held defendanL llable for sald amounL because Lhe same acLually
represenLed frelghL charges based on Lhe carbon orlglnals of Lhe shlps copy of Lhe bllls of ladlng where
Llmson appeared as conslgnee ln Lhe amounL of 8432942 and Lhose based on Lhe shlps cargo
manlfesLs where defendanL appeared as conslgnee ln Lhe amounL of 8187410 8espondenL CourL
admlLLed ln evldence sald coples of Lhe bllls of ladlng whlch were noL consldered by Lhe Commlssloner
because Lhey are noL acLually Lhe orlglnal copy of Lhe blll of ladlng 1he Commlssloner accepLed only
Lhe orlglnals of Lhe bllls of ladlng because he dld noL conslder even dupllcaLe orlglnals duly slgned as
orlglnals 1he shlps coples of Lhe bllls of ladlng and Lhe cargo manlfesLs were subsLanLlaLed by oLher
supporLlng documenLs whlch were found afLer Lhe reporL of Lhe Commlssloner from among Lhe
records salvaged from Lhe San nlcolas bodega flre or whlch were found among Lhe records kepL on
plalnLlffs Lermlnal offlce Sald documenLs were presenLed ln lleu of correspondlng orlglnal of Lhe
conslgnees copy of blll of ladlng whlch could noL be submlLLed Lo Lhe Commlssloner nor presenLed as
plalnLlffs evldence Lo Lhe CourL because Lhey were losL or desLroyed durlng Lhe remodelllng of
plalnLlffs offlce bulldlng or durlng Lhe flre aL plalnLlffs bodega aL San nlcolas where Lhey were broughL
for safekeeplng All sald documenLs were presenLed as evldence Lo prove LhaL all Lhe frelghL charges
for Lhe shlpmenLs evldence Lhereby were duly earned by plalnLlff and were properly deblLed ln
defendanLs charge accounL ApparenLly Lhe Commlssloner re[ecLed plalnLlffs clalms whlch were noL
acLually supporLed by Lhe orlglnal of Lhe bllls of ladlng noLwlLhsLandlng Lhe facL LhaL dupllcaLe orlglnal
of Lhe sald documenLs and oLher secondary evldence such as Lhe shlp cargo manlfesLs have been
presenLed as evldence As sLaLed above wlLnesses Cabllng and llagan LesLlfled LhaL Lhe pracLlce was
LhaL when Lhe orlglnals of Lhe blns of ladlng could noL be surrendered because Lhey have noL yeL been
recelved by Lhe conslgnee Lhe dellvery of Lhe cargo was neverLheless auLhorlzed and a dellvery recelpL
was prepared on Lhe basls of Lhe shlps cargo manlfesLs or Lhe shlps copy of Lhe bllls of ladlng 1hls
only shows LhaL Lhe shlps cargo manlfesLs or Lhe shlps copy of Lhe bllls of ladlng can be accepLed as
evldence of shlpmenLs made by defendanL slnce he was allowed Lo accepL dellvery of sald shlpmenLs
even wlLhouL presenLed hls copy of Lhe blll of ladlng

8y way of recaplLulaLlon Lhe LoLal of frelghL charges due plalnLlff based on Lhe frelghL charges
appearlng on Lhe face of Lhe bllls of ladlng supporLlng Lhe sLaLemenL of accounL aLLached Lo Lhe
complalnL ls 69813914 ueducL from sald amounL Lhe followlng
(1) 8ebaLe 11129118
(2) Cash paymenLs made by defendanL 23300783
(3) lrelghL ad[usLmenL 113843
(4) CosL of foodsLuffs purchased from defendanL41198233 1oLal 73941983
would show a balance ln favor of defendanL of 6126069

resenLed oLherwlse Lhe LoLal frelghL charges due plalnLlff afLer deducLlng Lhe rebaLe Lo whlch
defendanL ls enLlLled Lo ls 38686796 (69813914 mlnus 11129118)

AgalnsL sald frelghL charges of 38686796 defendanL should be credlLed
(1) Cash paymenL 23300783
(2) lrelghL ad[usLmenL 113843
(3) CosL of foodsLuffs 41198233
1oLal 64812863
glvlng a balance ln favor of defendanL of 6126069

WPL8LlC8L Lhe declslon of Lhe CourL a quo ls hereby MCulllLu and [udgmenL rendered agalnsL
plalnLlff on defendanLs counLerclalm for Lhe amounL of 6126069 ln an oLher respecLs Lhe appealed
declslon ls hereby Alll8MLu no pronouncemenL as Lo cosL


































10 | a g e

Gk No LSS764 Iebruary 16 1982
SCCIAL SLCUkI1 SS1LM pet|t|oner
vs
CCUk1 CI ALALS and MANILA CCSMCS ALkA1LD WA1Lk IAC1Ck INC respondents

A8Au SAn1CS !

1hls ls a peLlLlon Lo revlew a declslon of Lhe CourL of Appeals ln Soclal SecurlLy SysLem eL al vs Manlla
Cosmos AeraLed WaLer lacLory lnc CAC8 no S 032968 adverse Lo Lhe peLlLloner 1he
anLecedenL facLs conslsL of Lhe followlng

ln a peLlLlon flled wlLh Lhe Soclal SecurlLy Commlsslon SSC Lhe Soclal SecurlLy SysLem (SSS) LogeLher
wlLh !ose Concepclon Manuel Chan Manuel Cng 8oberLo Lal ArLuro Conzales Wllllam Co lederlco
Marclal SanLlago Mancuba !esus Crelencla Alfredo So and edro Aqulno Lhe lndlvldual peLlLloners
were soughL Lo be declared employees of Manlla Cosmos AerALed WaLer lacLory lnc (Cosmos) and
noL lndependenL conLracLors under Lhe followlng AgreemenL Lo eddle SofL urlnks

1 1he MAnulAC1u8L8 shall provlde Lhe LuuLL8 wlLh a dellvery Lruck Lo be used by Lhe laLLer under
hls own responslblllLy excluslvely ln Lhe sales of Lhe producLs of Lhe former purchased by Lhe LuuLL8
from Lhe MAnulAC1u8L8

2 1he LuuLL8 hlmself shall carefully and ln sLrlcL observance Lo Lrafflc regulaLlons drlve Lhe Lruck
furnlshed hlm by Lhe MAnulAC1u8L8 or should he employ a drlver or helpers such drlver or helpers
shall be hls employees under hls dlrecLlon and responslblllLy and noL LhaL of Lhe MAnulAC1u8L8 and
Lhelr compensaLlon lncludlng salarles wages overLlme pay separaLlon pay bonus or oLher
remuneraLlons and prlvlleges shall be for Lhe LuuLL8S own accounL

3 1he LuuLL8 shall be responslble for any damage Lo properLy deaLh or ln[urles Lo persons or
damage Lo Lhe Lruck used by hlm caused by hls own acLs or LhaL of hls drlver and helpers

4 1he LuuLL8 shall secure aL hls own expense all necessary llcense and permlLs requlred by law or
ordlnance and shall bear any and all expenses whlch may be lncurred by hlm ln Lhe sales of Lhe
MAnulAC1u8L8S producLs covered by Lhls conLracL

3 All goods sofL drlnks) purchased by Lhe LuuLL8 shall be charged Lo hlm aL a facLory prlce of 086
per case of Lhe 66 oz slze exwarehouse 8CvluLu Powever LhaL lf Lhe LuuLL8 purchases a LoLal
of noL less Lhan 200 cases of Lhe 63 oz slze a day he shall be enLlLled Lo a dealers dlscounL of 730

6 upon Lhe execuLlon of Lhls agreemenL Lhe LuuLL8 shall glve a cash bond ln Lhe amounL of 30000
agalnsL whlch Lhe MAnulAC1u8L8 shall charge Lhe LuuLL8 wlLh any unpald accounL aL Lhe end of
Lhe day or wlLh any damage Lo Lhe Lruck or oLher accounL whlch ls properly chargeable Lo Lhe
LuuLL8 wlLhln 30 days afLer LermlnaLlon of Lhls agreemenL Lhe cash bond afLer deducLlng proper
charges shall be reLurned Lo Lhe LuuLL8

7 1he LuuLL8 shall llquldaLe and pay hls accounL aL Lhe end of each day and hls fallure Lo do so shall
sub[ecL hls cash bond or so much Lhereof as may be necessary Lo such seL offs and paymenLs as shall
be proper agalnsL Lhe accounLs ln quesLlon

8 1hls conLracL shall be effecLlve only up Lo uecember 31 1962 and supersedes any or all oLher
prevlous conLracLs LhaL may have been enLered lnLo beLween Lhe parLles Powever elLher of Lhe
parLles may LermlnaLe Lhe same upon seven (7) days prlor noLlce Lo Lhe oLher

9 upon Lhe LermlnaLlon of Lhls agreemenL unless Lhe same ls renewed Lhe dellvery Lruck and such
oLher equlpmenL furnlshed by Lhe MAnulAC1u8L8 Lo Lhe LuuLL8 shall be reLurned by Lhe laLLer ln
good order and workable condlLlon ordlnary wear and Lear excepLed and shall prompLly seLLle hls
ouLsLandlng accounL lf any wlLh Lhe manufacLurer (8ollo pp 2423)

1he sLaLus of Lhe lndlvldual peLlLloners was lmporLanL because lf Lhey were employees of Cosmos and
noL lndependenL conLracLors Lhen Cosmos would have Lo pay Lhe employers share of premlum
conLrlbuLlons (employers and employees share) for and ln behalf of Lhe dellvery helpers as
employees of respondenL corporaLlon plus Lhe penalLles Lhereon for laLe remlLLance of premlum
conLrlbuLlons coverlng Lhe perlod of dellnquency from Lhe respecLlve daLes of Lhelr coverage up Lo Lhe
presenL as prayed for ln Lhe peLlLlon

AfLer hearlng Lhe SSC rendered a resoluLlon ln favor of Lhe SSS and Lhe peddlers holdlng LhaL an
employeremployee relaLlonshlp exlsLed beLween Cosmos and Lhe peddlers Cosmos appealed Lo Lhe
CourL of Appeals and ln a declslon promulgaLed on CcLober 16 1979 LhaL CourL afflrmed Lhe
resoluLlon of Lhe SSC Powever upon a moLlon for reconslderaLlon Lhe CourL of Appeals on CcLober
13 1980 seL aslde lLs prevlous declslon and reversed Lhe resoluLlon of Lhe SSC Pence Lhe lnsLanL
appeal where Lhe peLlLloner ls Lhe SSS alone Lhe lndlvldual peddlers have noL seen flL Lo appeal

We could have dlsmlssed Lhe lnsLanL peLlLlon by mlnuLe resoluLlon because precedenLs warranL such
an acLlon 8uL Lo puL an end Lo llLlgaLlons of Lhls sorL and arresL whaL Cosmos calls [udlclal harassmenL
a declslon ls ln order

ln Maflnco 1radlng CorporaLlon vsCple eL al no L37790 March 23 1976 70 SC8A 139 Lhe quesLlon
was wheLher Lhere was an employer employee relaLlonshlp under Lhe Lerms of a peddllng conLracL ln
words almosL ldenLlcal Lo Lhe one quoLed above 1hls CourL Lhru Mr !usLlce Aqulno sald

A resLaLemenL of Lhe provlslons of Lhe peddllng conLracL ls necessary ln order Lo flnd ouL wheLher
under LhaL lnsLrumenL 8epomanLa and Moralde were lndependenL conLracLors or mere employees of
Maflnco

under Lhe peddllng conLracL Maflnco would provlde Lhe peddler wlLh a dellvery Lruck Lo be used ln
Lhe dlsLrlbuLlon of Cosmos sofL drlnks (ar 1) Should Lhe peddler employ a drlver and helpers he
would be responslble for Lhelr compensaLlon and soclal securlLy conLrlbuLlons and he should comply
wlLh appllcable labor laws ln relaLlon Lo hls employees (ar 2)

11 | a g e

1he peddler would be responslble for any damage Lo persons or properLy or Lo Lhe Lruck caused by hls
own acLs or omlsslons or Lhose of hls drlver and helpers (ar 3) Maflnco would bear Lhe cosL of
gasollne and malnLenance of Lhe Lruck (ar 4) 1he peddler would secure aL hls own expense Lhe
necessary llcenses and permlLs and bear Lhe expenses Lo be lncurred ln Lhe sale of Cosmos producLs
(ar 3)

1he sofL drlnks would be charged Lo Lhe peddler aL 232 per case of 24 boLLles exwarehouse Should
he purchase aL leasL 230 cases a day he would be enLlLled Lo a peddlers dlscounL of eleven pesos (ar
6) 1he peddler would posL a cash bond ln Lhe sum of 1300 Lo answer for hls obllgaLlons Lo Maflnco
(ar 7) and anoLher cash bond of 1000 Lo answer for hls obllgaLlons Lo hls employees (ar 11) Pe
should llquldaLe hls accounLs aL Lhe end of each day (ar 8) 1he conLracL would be effecLlve up Lo
May 31 1973 LlLher parLy mlghL LermlnaLe lL upon flve days prlor noLlce Lo Lhe oLher (ar 9)

We hold LhaL under Lhelr peddllng conLracLs of 8epomanLa and Moralde were noL employees of
Maflnco buL were lndependenL conLracLors as found by Lhe nL8C and lLs facLflnder and by Lhe
commlLLee appolnLed by Lhe SecreLary of labor Lo look lnLo Lhe sLaLus of Cosmos and Maflnco
peddlers 1hey were dlsLrlbuLors of Cosmos sofL drlnks wlLh Lhelr own caplLal and employees
Crdlnarlly an employee or a mere peddler does noL execuLe a formal conLracL of employmenL Pe ls
slmply hlred and he works under Lhe dlrecLlon and conLrol of Lhe employer

8epomanLa and Moralde volunLarlly execuLed wlLh Maflnco formal peddllng conLracLs whlch lndlcaLe
Lhe manner ln whlch Lhey would sell Cosmos sofL drlnks 1haL clrcumsLance slgnlfles LhaL Lhey were
acLlng as lndependenL buslnessmen 1hey were free Lo slgn or noL Lo slgn LhaL conLracL lf Lhey dld noL
wanL Lo sell Cosmos producLs under Lhe condlLlons deflned ln LhaL conLracL Lhey were free Lo re[ecL lL

8uL havlng slgned lL Lhey were bound by lLs sLlpulaLlons and Lhe consequences Lhereof under exlsLlng
labor laws Cne such sLlpulaLlon ls Lhe rlghL of Lhe parLles Lo LermlnaLe Lhe conLracL upon flve days
prlor noLlce (ar 9) WheLher Lhe LermlnaLlon ln Lhls case was an unwarranLed dlsmlssal of an
employee as conLended by 8epomanLa and Moralde ls a polnL LhaL cannoL be resolved wlLhouL
submlsslon of evldence uslng Lhe conLracL lLself as Lhe sole crlLerlon Lhe LermlnaLlon should perforce
be characLerlzed as slmply Lhe exerclse of a rlghL freely sLlpulaLed upon by Lhe parLles

ln deLermlnlng Lhe exlsLence of employeremployee relaLlonshlp Lhe followlng elemenLs are generally
consldered namely (1) Lhe selecLlon and engagemenL of Lhe employee (2) Lhe paymenL of wages (3)
Lhe power of dlsmlssal and (4) Lhe power Lo conLrol Lhe employees conducL alLhough Lhe laLLer ls
fllp mosL lmporLanL elemenL (vlana AlLagadan and lga 99 hll 406 411 ClLlng 33 Am !ur 443)

Cn Lhe oLher hand an lndependenL conLracLor ls one who exerclse lndependenL employmenL and
conLracLs Lo do a plece of work accordlng Lo hls own meLhods and wlLhouL belng sub[ecL Lo conLrol of
hls employer excepL as Lo Lhe resulL of Lhe work (Mansal vs Cocheco Lumber Co 96 hll 941)

Among Lhe facLors Lo be consldered are wheLher Lhe conLracLor ls carrylng on an lndependenL
buslness wheLher Lhe work ls parL of Lhe employers general buslness Lhe naLure and exLenL of Lhe
work Lhe sklll requlred Lhe Lerm and duraLlon of Lhe relaLlonshlp Lhe rlghL Lo asslgn Lhe performance
of Lhe work Lo anoLher Lhe power Lo LermlnaLe Lhe relaLlonshlp Lhe exlsLence of a conLracL for Lhe
performance of a speclfled plece of work Lhe conLrol and supervlslon of Lhe work Lhe employers
powers and duLles wlLh respecL Lo Lhe hlrlng flrlng and paymenL of Lhe conLracLors servanLs Lhe
conLrol of Lhe premlses Lhe duLy Lo supply Lhe premlses Lools appllances maLerlal and labor and Lhe
mode manner and Lerms of paymenL (36 C!S 46)

1hose LesLs Lo deLermlne Lhe exlsLence of an employeremployee relaLlonshlp or wheLher Lhe person
dolng a parLlcular work for anoLher ls an lndependenL conLracLor cannoL be saLlsfacLorlly applled ln Lhe
lnsLanL case lL should be obvlous by now LhaL Lhe lnsLanL case ls a penumbral sul generls case lylng on
Lhe shadowy borderllne LhaL separaLes an employee from an lndependenL conLracLor

ln deLermlnlng wheLher Lhe relaLlonshlp ls LhaL of employer and employee or wheLher one ls an
lndependenL conLracLor each case musL be deLermlned on lLs own facLs and all Lhe feaLures of Lhe
relaLlonshlp are Lo be consldered (36 C!S 43) We are convlnced LhaL on Lhe basls of Lhe peddllng
conLracL no employeremployee relaLlonshlp was creaLed (AL pp 161163 emphasls supplled)

We hold LhaL conformably Lo Maflnco Lhe peddllng conLracL lnvolved ln Lhe lnsLanL peLlLlon makes Lhe
peddler an lndependenL conLracLor AddlLlonally We have Laken lnLo accounL Lhe facL LhaL Lhe
lndlvldual peLlLloners before Lhe SSC who were Lhe prlnclpal beneflclarles of Lhe peLlLlon have become
lndlfferenL Lo Lhelr cause

WPL8LlC8L Lhe [udgmenL of Lhe CourL of Appeals ls hereby afflrmed CosLs agalnsL Lhe peLlLloner