Phil-Air Conditioning Center (Phil-Air)
filed this petition for review on certiorari
On various dates between March 5,
1990, and August 29, 1990, petitioner Phil-Air sold to respondent RCJ Lines
four Carrier Paris 240 air conditioning units for buses (units). The
units included compressors, condensers, evaporators, switches, wiring, circuit
boards, brackets, and fittings.
Phil-Air allegedly performed regular
maintenance checks on the units pursuant to the one-year warranty on parts and
labor. RCJ Lines issued three post-dated checks in favor of Phil-Air to partly
cover the unpaid balance.
All the post-dated checks were
dishonored when Phil-Air subsequently presented them for payment. Check No.
479759 was returned because it was drawn against insufficient funds, while
Check Nos. 479760 and 479761 were returned because payments were stopped.
Before presenting the third check for
payment, Phil-Air sent a demand letter to Rolando Abadilla, Sr. asking him to
fund the post-dated checks. In view of the failure of RCJ Lines to pay the
balance despite demand, Phil-Air filed on April 1, 1998 the complaint for sum of money with prayer for the issuance
of a writ of preliminary attachment.
In its answer with compulsory
counterclaim, RCJ Lines admitted that it purchased the units in the total
amount of P1,240,000.00 and that it had only paid P400,000.00. It refused to
pay the balance because Phil-Air allegedly breached its warranty.
RCJ Lines averred that the units did
not sufficiently cool the buses despite repeated repairs. Phil-Air purportedly
represented that the units were in accord with RCJ Lines’ cooling requirements
as shown in Phil-Air’s price quotation. The price quotation provided that full
payment should be made upon the units’ complete installation. Complete
installation, according to RCJ Lines, is equivalent to being in operational
condition.
RCJ Lines claimed that it was also
entitled to be reimbursed for costs and damages occasioned by the enforcement
of the writ of attachment.
Issues:
(1) Whether the claim of Phil-Air was
barred by laches;
(2) Whether Phil-Air should reimburse
RCJ Lines for the counterbond premium and its alleged unrealized profits;
(3) Whether RCJ Lines proved its
alleged unrealized profits arising from the enforcement of the preliminary writ
of attachment.
Held:
1. Phil-Air’s claim is not barred by laches. In general, there is no
room to apply the concept of laches when the law provides the period within
which to enforce a claim or file an action in court. Phil-Air’s complaint for
sum of money is based on a written contract of sale. The ten-year prescriptive
period under Article 1144 of the Civil Code thus applies.
In the present case, both parties
admit the existence and validity of the contract of sale. They recognize that
the price quotation dated August 4, 1989, contained the terms and
conditions of the sale contract. They also agree that the price and description
of the units were indicated on the sales invoice.
Laches is defined as the failure or
neglect for an unreasonable and unexplained length of time, to do that which by
exercising due diligence, could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or
declined to assert it.
While the CA correctly held that
prescription and estoppel by laches are two different concepts, it failed to
appreciate the marked distinctions between the two concepts.
The court resolves whether the
claimant asserted its claim within a reasonable time and whether its
failure to do so warrants the presumption that it either has abandoned it or
declined to assert it. The court determines the claimant’s intent to assert its
claim based on its past actions or lack of action. After all, what is invoked
in instances where a party raises laches as a defense is the equity
jurisdiction of the court.
On the other hand, if the law gives
the period within which to enforce a claim or file an action in court, the
court confirms whether the claim is asserted or the action is filed in court within
the prescriptive period. The court determines the claimant’s intent to
assert its claim by simply measuring the time elapsed from the proper reckoning
point (e.g., the date of the written contract) to the filing of the action or
assertion of the claim.
In sum, where the law provides the
period within which to assert a claim or file an action in court, the
assertion of the claim or the filing of the action in court at any time within
the prescriptive period is generally deemed reasonable, and thus,
does not call for the application of laches. As we held in one case, unless
reasons of inequitable proportions are adduced, any imputed delay
within the prescriptive period is not delay in law that would bar relief.
Not all the elements of laches are
present. To repeat, Phil-Air filed the complaint with the RTC on April 1, 1998.
The time elapsed from August 4, 1989 (the date of the price quotation, which is
the earliest possible reckoning point), is eight years and eight months, well
within the ten-year prescriptive period. There was simply no delay (second
element of laches) where Phil-Air can be said to have negligently slept on
its rights. there is no basis for laches as the facts of the present case do
not give rise to an inequitable situation that calls for the application of
equity and the principle of laches.
2. Phil-Air is not directly
liable for the counter-bond premium and RCJ Lines’ alleged unrealized profits.
A writ of preliminary attachment is a
provisional remedy issued by the court where an action is pending to be levied
upon the property or properties of the defendant. The property is held by the
sheriff as security for the satisfaction of whatever judgment that might be
secured by the attaching party against the defendant.
The grant of the writ is conditioned
not only on the finding of the court that there exists a valid ground for its
issuance. The Rules also require the applicant to post a bond.
Section 4 of Rule 57 of the Rules of
Civil Procedure (Rules) provides that “the party applying for the order
must…give a bond executed to the adverse party in the amount fixed by the court
in its order granting the issuance of the writ, conditioned that the latter
will pay all the costs that may be adjudged to the adverse party and all
damages that he may sustain by reason of the attachment, if the court
shall finally adjudge that the applicant was not entitled thereto.”
The enforcement of the writ
notwithstanding, the party whose property is attached is afforded relief to
have the attachment lifted. There are various modes of discharging an
attachment under Rule 57, viz.:
(1) by depositing cash or posting a
counter-bond under Section 12;
(2) by proving that the attachment
bond was improperly or irregularly issued or enforced, or that the bond is
insufficient under Section 13;
(3) by showing that the attachment is
excessive under Section 13; and (4) by claiming that the property is exempt
from execution under Section 2.
RCJ Lines availed of the first mode by
posting a counter-bond.
Under the first mode, the court will
order the discharge of the attachment after (1) the movant makes a cash deposit
or posts a counterbond and (2) the court hears the motion to discharge the
attachment with due notice to the adverse party.
The amount of the cash deposit or
counter-bond must be equal to that fixed by the court in the order of
attachment, exclusive of costs. The cash deposit or counter-bond shall secure
the payment of any judgment that the attaching party may recover in the action.
The discharge under Section 12 takes
effect upon posting of a counter-bond or depositing cash, and after hearing to
determine the sufficiency of the cash deposit or counter-bond. On the other
hand, the discharge under Section 13 takes effect only upon showing that the
plaintiff’s attachment bond was improperly or irregularly issued, or that the
bond is insufficient. The discharge of the attachment under Section 13 must be made
only after hearing.
As discussed above, it is patent that
under the Rules, the attachment bond answers for all damages incurred by the
party against whom the attachment was issued. Thus, Phil-Air cannot be held
directly liable for the costs adjudged to and the damages sustained by RCJ
Lines because of the attachment. Section 4 of Rule 57 positively lays down the
rule that the attachment bond will pay “all the costs which may be
adjudged to the adverse party and all damages which he may sustain by reason of
the attachment, if the court shall finally adjudge that the applicant was not
entitled thereto.”
The RTC, instead of declaring Phil-Air
liable for the alleged unrealized profits and counter-bond premium, should have
ordered the execution of the judgment award on the attachment bond. To impose
direct liability to Phil-Air would defeat the purpose of the attachment bond,
which was not dissolved despite the lifting of the writ of preliminary
attachment.
The order to refund the counter-bond
premium is likewise erroneous. The premium payment may be deemed a cost
incurred by RCJ Lines to lift the attachment. Such cost may be charged against
the attachment bond.
3. RCJ Lines failed to prove its
alleged unrealized profits.
In Spouses Yu v. Ngo Yet Te, we
held that if the claim for actual damages covers unrealized profits, the amount
of unrealized profits must be established and supported by independent evidence
of the mean income of the business undertaking interrupted by the illegal
seizure.
We explained in Spouses Yu that
to merit an award of actual damages arising from a wrongful attachment, the
attachment defendant must prove, with the best evidence obtainable, the fact of
loss or injury suffered and the amount thereof. Such loss or injury must be of
the kind which is not only capable of proof but must actually be proved with a
reasonable degree of certainty. As to its amount, the same must be measurable
based on specific facts, and not on guesswork or speculation.
Similarly, the evidence adduced by RCJ
Lines to show actual damages fell short of the required proof. Its average
daily income cannot be derived from the summary of daily cash collections from
only two separate occasions, i.e., August 22-23 and September 2-3, 2000.
The data submitted is too meager and insignificant to conclude that the buses
were indeed earning an average daily income of P12,000.00.
More significant, the person who
prepared the unsigned summary of daily cash collections was not presented
before the RTC to verify and explain how she arrived at the computation. The
dispatchers who prepared the collection reports were likewise not presented;
some of the reports were also unsigned. While the summary was approved by
Rolando Abadilla, Jr., in his testimony on the alleged unrealized profits was
uncorroborated and self-serving.
Nonetheless, we recognize that RCJ
Lines suffered some form of pecuniary loss when two of its buses were
wrongfully seized, although the amount cannot be determined with certainty.
We note that in its prayer for the
issuance of the writ of preliminary attachment, Phil-Air alleged that RCJ Lines
was guilty of fraud in entering into the sale transaction. A perusal of the
record, however, would show that Phil-Air failed to prove this bare assertion.
This justifies an award of temperate or moderate damages in the amount of Php
50,000.00.
No comments:
Post a Comment