Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12266 November 12, 1918
GUTIERREZ HERMANOS, plaintiff-appellee,
vs.
ORIA HERMANOS & CO., defendant-appellant.
Alfredo Chicote, Jose Arnaiz and Pascual B. Azanza for appellant.
Crossfield, & O'Brien for appellee.
TORRES, J.:
On August 12, 1909, counsel for the commercial firm of Gutierrez Hermanos, of the city of Manila, filed a complaint in the Court of First Instance of said city, seeking to recover from the firm of Oria Hermanos & Co., the payment of the sum P147,204.28 besides the interest thereon from June 30, 1909, alleging among other things that, between the plaintiff and defendant companies, there existed some commercial relations which gave rise to the opening in their books of a mutual current account; that from this account to which the said defendant company had conformed, there remained a balance standing against the said defendant company, which balance amounts to the sum above-mentioned; that the plaintiff company had opportunely sent to the defendant company an abstract of the current account which shows the said balance for which the defendant company is liable to the plaintiff.
In answer to the complaint, the defendant company denied the allegations therein contained, and alleged that the plaintiff company, as a commission agent, bound itself to buy and sell certain merchandise for the defendant, and that said plaintiff, in its accounts, entered fictitious or fraudulent prices of the goods, and for this reason the defendant company prayed that the plaintiff company be ordered to render an account of its transactions as such commission agent.
In view of the evidence adduced at the trial of the case by both parties the judge rendered on April 24, 1912, a judgment ordering the plaintiff company to render to the defendant company an account supported by vouchers of the amounts charged against the latter as regards the internal revenue taxes, the price and weight of the sacks of rice, and the value of the boxes of kerosene oil acquired by the plaintiff in the name and for the account of the defendant company, and condemning the defendant company to pay the plaintiff the amount prayed for in the complaint after deducting therefrom whatever amount or amounts would result in favor of the defendant company from the accounts to be rendered by the plaintiff.
From this judgment both parties appealed. In March 30, 1915, this court rendered judgment whereby the plaintiff was ordered to render to the defendant an account supported by vouchers of the price and other expenses incurred in the shipment of rice as shown by the invoices examined during the trial of the case, as well as the 53 invoices mentioned by the parties at the hearing of November 29, 1910, and also the price of all the kerosene oil acquired by the plaintiff for the defendant, the invoices of which appear to have been mentioned at the trial of December 28, 1910, an lastly, to account for the amounts paid as ad valorem duties on the rice, salt, kerosene oil, and other goods the duties on which were charged against the defendant.
The case having been remanded to the lower court in compliance with the said decision of this court, the plaintiff company presented to the court a written statement of the accounts and upon hearing the defendant, the latter decreed the disapproval of the accounts so rendered, and notified the plaintiff to present to the court, within a short time, the vouchers supporting said accounts. By virtue of a written agreement entered into between the parties, the judge appointed D. M. Fleming as referee authorized to hear the parties respecting the rendition of accounts including the documents relative thereto, and to report to the court all the questions brought up by the parties during the proceedings before him. After Fleming had entered upon his duties in conformity with his appointment and had held several hearings in which the respective counsel of both parties were present, he filed in court on February 2, 1916, a report wherein he found that only 20 invoices of rice had been justified as correct; that 8 had been accepted as transferred to Legaspi according to their entries; that 56 had been proved and the amount of P2,479.56 had been acknowledged as due to the defendant; that one valued at P110.30 was erroneously accepted in favor of the plaintiff; that 76 invoices of rice have not been supported by vouchers; that of the invoices of kerosene oil only 5 had been supported by vouchers; an that, as regards other invoices comprising 592 cans, it was proved that in all of them, there were overcharges amounting to P78.63 as discounts not granted, and in one particular case, there was a recharge of the price. It was also found by him that there was no proof as regards the rest of the invoices which number 73.
The defendant accepted this report, and asked the court to approve it, but the plaintiff opposed its approval. The court therefore ordered the referee to file an amended report, which should include facts that were not determined in the first report and for which evidence was presented, and from this order of the lower court the defendant excepted.lawphil.net
In compliance with this order of the court, on June 29, 1916, the referee submitted a second report to the court, which report contains the following summary:
SUMMARY.
Equitable discounts which should be made in
favor of the defendants from the invoices of rice according to the report | P16,962.05 |
| Proportional discounts from seven invoices | 1,967.00 |
|
18,929.05 |
| Less concessions in two invoices made in favor of the plaintiffs | 59.56 |
|
18,869.49 |
| Proportional discounts in the invoices of kerosene oil | 1,742.40 |
| Internal revenue taxes rejected | 1,862.99 |
|
22,474.88 |
| Plus 2 per cent commission of agents over and above the amount granted | 449.50 |
|
22,924.38 |
| To this should be added the sum adjudged by me in favor of the defendants as per my first report, over the invoices, as follows: In favor of the defendants | P2,479.56 |
| In favor of the plaintiffs | 110.30 |
|
2,369.26 |
| Plus 2 per cent commission | 47.39 |
|
2,416.65 |
| Total which should be reimbursed to the defendants | 25,341.03 |
| Interest on said total till June 30, 1909, estimated at 45 per cent | 11,403.46 |
| Total sum which should be allowed in favor of Oria Hermanos y Ca |
36,744.49 |
In view of this second report of the referee, and of the allegations of both parties, the lower court approved said report and rendered a judgment on August 16, 1916, adjudicating to the plaintiff the sum claimed in the complaint less the sum of P36,744.49, or the net balance of P110,459.79. From this judgment, the defendant alone appealed. The plaintiff having asked for the execution of the sentence which was acceded to by the judge, the latter ordered the return to the plaintiffs of the sum of fifty thousands pesos (P50,000) deposited as security for an order of attachment decreed in this case. The corresponding bill of exceptions having been presented by the defendant, the same was approved, certified, and forwarded to the clerk of this court.
With regard to the questions involved and to which the defendant- appellant has assigned errors in its brief, we believe that the first error assigned is untenable. It is a fact duly established that the referee took the oath of office before the judge of the Court of First Instance, as shown by the authentic certificate of said judge in his indorsement on the appointment of said referee, and for this reason, it can not be held that the proceedings had before the said referee were null and void.
As to the second error assigned regarding the execution of the sentence, we hold that Act No. 190, section 144, does not truly have for its object the annulment of an order of execution before the expiration of the period fixed for the perfecting of the bill of exceptions, unless for special reasons stated in the bill of exceptions the court shall order that execution be not stayed, because, if such reasons really existed, the failure to state them in the bill of exceptions does not vitiate the order of execution, for, according to the doctrine laid down in the case of Macke vs. Camps (5 Phil. Rep., 185), the Supreme Court will not interfere to modify, control, or inquire into the exercise of the discretion of the Court of First Instance to direct by special order that execution issue upon a final judgment before the period for preparing a bill of exceptions has expired, unless it appear that there has been an abuse or excess of authority on the part of the trial judge and, consequently, this error assigned can not be sustained, inasmuch as it is not shown that there has been an abuse or excess of authority.
Pending the proceedings in this court, by virtue of the appeal interposed by the defendant from the judgment rendered by the lower court, wherein an order of attachment, was issued, the attachment should be left undisturbed until the pending appeal is finally decided.
The principal issue involved in this case is: Upon which of the two reports presented by the referee is the judgment appealed from especially based?
The referee in his first report says that 76 invoices of rice and 73 invoices of kerosene oil were not supported by vouchers, and that the charges made by way of internal revenue taxes could not be estimated, unless all the invoices of rice were proved.
In his second report which is based upon the invoices wherein there was an error according to the evidence, together with the other data and information obtained personally by the said referee, the latter, estimating the average error which might have been committed in the invoices not satisfactorily proved, proceeded to fix at his own discretion the mistake proportionally to the figures as stated in the invoices. With regard to the internal revenue charges, he adjudged in favor of the defendant the sum shown in his statement of accounts (Exhibits A and B, p. 1677), having considered this statement more exact than that presented by the plaintiff.
Although the defendant company can not be held liable for the value of the invoices not duly proved by the plaintiff, nevertheless, if the records show that the defendant company had received the goods consigned to it under invoices and the only defect was that excessive prices were charged and certain amounts were unduly debited, it would not be just, that for said failure on the part of the plaintiff to prove all of the invoices, the defendant company would deny liability to pay for the goods received by it, after deducting from the price the excess and the quantities for which it was not liable. From this it follows that the first report of the referee can not be the proper basis for the definite settlement of this case, and it is necessary to determine the amount for which the defendant would be liable to pay in view of the evidence adduced.
After examining the documents attached to the second report which served the basis for the referee's decision, we find that the referee has not proceeded in his estimates through whimsical and arbitrary methods, the commission, the charges unduly made in the invoices of kerosene oil, and in reducing the picos of Saigon rice to correspond with the picos of Manila, with the corresponding reduction for waste and leakage. With regard to the last item, the referee fixed the difference between the pico of Saigon and that of Manila at 5 per cent of Saigon, including waste and leakage, in accordance with the book of weights and measures of international commerce by Macmillan & Co., wherein it appears that a pico in the Straits Settlements weighs 60.478 kilos, and the Saigon pico is considered equal to that of the Straits Settlements.
The witness Tomas Oria, a man versed in matters regarding exact and precise figures, stated (p. 224) before the referee that the pico of Manila weighs 63.25 kilos an that of Saigon, 63 kilos, so that the difference between the pico of Saigon and that of Manila is only 3.15. Inasmuch as, according to the referee 1/2 per cent is the reduction effected by reason of waste and leakage and estimated for each sack which weighs more than a pico, as can be seen from its operations, it is evident that a reduction of 3.50 per cent as the difference in weight, and the waste and leakage should have been the more reasonable reduction as alleged by the defendant in its objections to the provisional report. (Record, p. 1653.)
There is also error in determining the amount earned as commission, which should have been charged to the defendant by the plaintiff, because the amounts upon which the estimate was made include the internal revenue taxes unduly charged, so that in the invoices attached to the records it appears that the plaintiff company never took its commission on said taxes, but took it on the value of the invoice, without including the internal revenue charges. This correction was made to fix definitely the amount to which the defendant is entitled.
With respect to the compound interest, the referee asserts that he made his estimates in a prudent manner, because the computation of all the amounts unduly charged would involve a great deal of work, The procedure followed by the referee is not permissible inasmuch as the record furnishes sufficient data whereby the compound interests, which resulted from the unlawful charges entered against the defendant, could have been adjusted in a correct and reasonable manner, for such interests can be determined in the same manner that the plaintiff determined and charged them against the defendant.
Exhibit B, page 146 of the first sheet, is a current account of Oria Hermanos & Co. opened in the books of the plaintiff during the second semester of 1908, and shows that to every amount charged to the defendant there is a corresponding amount in the column designated as "Numbers" and the same is true as regards the amounts under "Credit." It also appears that in the column under "Numbers." the amounts of the products of the quantities under "Debit" or "Credit" multiplied by the number of days during which such amounts should earn interest, theses quantities under "Numbers" being lacking only of two whole figures and two decimals to the right. At the end of the account, the difference between the sums of the numbers under "Debit" and "Credit" is divided by 45.621 1/2, the divisor of which is precisely the denominator of 8/836500 simplified by 8; all of which shows that the interests were found by multiplying the amounts by the respective number of days during which such amounts should earn interests and by dividing the product by 100, disregarding the decimal figures but considering them as an entire unit, and adding it to the whole figures if they exceeded the decimals of 50 hundredths, and dividing the difference of the sums of these quotations of "Debit" and "Credit" by 45.62 1/2, and the capitalized quotient was put in the column of "Amounts" or "Capitals." With this operation, the exact and just amounts corresponding to the defendant were arrived at.
Regarding the invoices of kerosene oil, the referee found that the mistake in the invoices, Exhibits 157, 159, 164, 163, and 165, amounts to P78.63. For this reason he adjudged 15 centavos a box to cover the shortage in addition to the discounts which should be allowed to the defendants.
It is proven (Exhibits 157 and 166) that the plaintiff, in buying the kerosene oil, specified in the 5 invoices aforementioned sometimes obtained a discount of 2 1/2 per cent and at other time a discount of 1 per cent, and that the purchase price was less than that stated in the invoices. In the first decision rendered in this case, it was held that the plaintiff, as commission agent of the defendant, had no right to retain for itself the discounts obtained. For this reason, the conclusion arrived at by the referee that said plaintiff should reimburse to the defendant the discounts an the interest thereon unduly charged, is correct, although it is not just that the amount to be paid back is to be determined by the number of boxes of kerosene oil invoiced, inasmuch as said amount should be made up not only of the increase in prices but also of the is counts. The first, that is, the increase in prices, depends upon the number of boxes invoiced, and the second upon the total price of each invoice, estimating therefore the excess price in proportion to the number of boxes, and the discount not credited to the defendant, in proportion to the total prices of each invoice, and capitalize the interests of each semester.
Aside from the mistakes indicated above, we find that the conclusions arrived at by the referee in his last report, based on the grounds therein stated, are just and reasonable, inasmuch as they have not been impeached in substance by the appellant. In view of the facts above set forth and the contents of the Statement C of Exhibit A (record, pp. 100 and 1177), found to be correct by the referee and not contradicted by the firm of Gutierrez Hermanos, it follows that the latter firm should pay to Oria Hermanos & Co., the sum of P37,063.57 with the exception of what had been committed in connection therewith.
Upon a comparison of the amount stated in the preceding paragraph and that fixed by the referee in his report, it will be seen that there is a very small difference between the two, and that is the sum of P319.08, which is due to the mistakes in the procedure mentioned in the preceding paragraphs and also due to the result of the computation of the compound interests to which the defendant was entitled, which result amounted to the sum due to the defendant.
Considering the facts above set forth and the evidence furnished by the record, we arrived at the conclusion that the defendant firm is only entitled to a reduction of the sum of P37,063.57 from the amount of P147,204.28 adjudged in favor of the plaintiff firm in the previous decision of this court under date of March 30, 1915, 1 and for this reason the defendant Oria Hermanos & Co. is found liable to pay Gutierrez Hermanos the remaining balance of P110,140.71 and the interest thereon at the rate of 8 per cent per annum from June 30, 1909, to the date of payment.
For the foregoing considerations, whereby the errors assigned to the judgment appealed from are deemed to have been refuted, we hold that, after deducting the sum of P37,063.57 from the amount specified in the previous decision of this court in this controversy, the defendant Oria Hermanos & Co. should be, as it hereby is, condemned to pay to the plaintiff Gutierrez Hermanos the sum of P110,140.71 and the interest thereon at the rate of 8 per cent per annum from June 30, 1909, and to pay the costs. So ordered.
Johnson, Street, Malcolm, Avanceña and Fisher, JJ., concur.
Footnotes
1 30 Phil. Rep., 491.
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