Quebral v. CA

G.R. No. 101941 (January 25, 1996)

SC upheld Quebral's liability for unpaid amounts, affirming dismissal reversal; demurrer negated evidence.

Facts:

The case involves a complaint filed by Union Refinery Corporation (private respondent) against Edmundo Quebral (petitioner) and Higidio B. Gay-ya, Jr. in the Regional Trial Court, Branch 172, Valenzuela, for the collection of P102,991.54, representing unpaid oil products allegedly purchased by them. The complaint was based on a credit application approved by the private respondent, allowing the petitioner to sell its products in specified areas.

The private respondent alleged that the petitioner and Gay-ya conspired to defraud it by falsely representing sales to two service stations, which had not ordered any products. The private respondent sought a writ of preliminary attachment, claiming that the defendants intended to leave the country, exposing it to irreparable damages. The trial court granted the attachment, leading to the seizure of properties owned by the petitioner and Gay-ya.

Gay-ya filed a motion to dismiss, claiming he was merely a sales agent for the petitioner. The private respondent opposed this, asserting that Gay-ya had converted the proceeds of the oil products for personal use. The trial court denied Gay-ya's motion and later lifted the attachment against the petitioner, citing insufficient evidence of his intent to abscond.

After the private respondent presented its evidence, the petitioner filed a demurrer to evidence, arguing that the evidence was insufficient to hold him liable. The trial court dismissed the case against the petitioner, finding no evidence of his participation in the transactions.

The private respondent appealed the trial court's decision to the Court of Appeals, which reversed the trial court's ruling, finding that the petitioner was liable for the unpaid amounts based on various pieces of evidence, including a letter from the petitioner acknowledging his representative's transactions.

Legal Issues:

  1. What are the effects of a reversal by an appellate court of a trial court's order of dismissal based on a demurrer to evidence?
  2. When and how does the Supreme Court review factual findings of the Court of Appeals?

Arguments:

  • Petitioner’s Arguments:

    • The petitioner contended that he was not a partner of Gay-ya and had no knowledge of the transactions with the private respondent.
    • He argued that the trial court's dismissal was justified due to the lack of evidence linking him to the transactions.
    • The petitioner claimed that the appellate court erred in admitting certain evidence and in finding him liable based on the evidence presented.
  • Private Respondent’s Arguments:

    • The private respondent argued that the petitioner had judicially admitted the approval of his credit application and had acknowledged Gay-ya as his representative.
    • It contended that the evidence presented was sufficient to establish the petitioner’s liability for the unpaid sales invoices.
    • The private respondent highlighted the petitioner’s own letter, which indicated his involvement in the transactions.

Court’s Decision and Legal Reasoning:

The Supreme Court affirmed the decision of the Court of Appeals, ruling that the appellate court correctly found the petitioner liable for the unpaid amounts. The Court emphasized that the petitioner’s judicial admissions and the evidence presented by the private respondent were sufficient to establish his liability.

The Court clarified that when a demurrer to evidence is granted and subsequently reversed on appeal, the movant loses the right to present evidence in their favor. The petitioner’s failure to present evidence after filing a demurrer was a critical factor in the Court's decision. The Court also noted that the appellate court's findings were supported by substantial evidence, including the petitioner’s own letter, which contradicted his claims of ignorance regarding the transactions.

Significant Legal Principles Established:

  1. A demurrer to evidence, if granted and later reversed, results in the movant losing the right to present evidence in their favor.
  2. Judicial admissions made in pleadings are binding and cannot be disputed later in the proceedings.
  3. The factual findings of the Court of Appeals are generally conclusive, but the Supreme Court may review them if they contradict the findings of the trial court.