CASE NO. 2011-0074: SLL INTERNATIONAL CABLES SPECIALIST AND SONNY L. LAGON VS. NATIONAL LABOR RELATIONS COMMISSION, 4^TH DIVISION, ROLDAN LOPEZ, EDGARDO ZUÑIGA AND DANILO CAÑETE (G.R. NO. 172161, 2 MARCH 2011, MENDOZA, J.) SUBJECTS: WAGE DIFFERENTIALS; ILLEGAL DISMISSAL. (BRIEF TITLE: SLL INTERNATIONAL VS. NLRC ET AL).

SECOND DIVISION

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D E C I S I O N

MENDOZA, J.:

Assailed in this petition for review on certiorari are the January 11, 2006 Decision^[1]  and the March 31, 2006 Resolution^[2]of the Court of Appeals (CA), in CA-G.R. SP No. 00598 which affirmed with modification the March 31, 2004 Decision^[3] and December 15, 2004 Resolution^[4] of the National Labor Relations Commission (NLRC). The NLRC Decision found the petitioners, SLL International Cables Specialist (SLL) and its manager, Sonny L. Lagon (petitioners), not liable for the illegal dismissal of Roldan Lopez, Danilo Cañete and Edgardo Zuñiga (private respondents) but held them jointly and severally liable for payment of certain monetary claims to said respondents.

A chronicle of the factual antecedents has been succinctly summarized by the CA as follows:

Sometime in 1996, and January 1997, private respondents Roldan Lopez (Lopez for brevity) and Danilo Cañete (Cañete for brevity), and Edgardo Zuñiga (Zuñiga for brevity) respectively, were hired by petitioner Lagon as apprentice or trainee cable/lineman. The three were paid the full minimum wage and other benefits but since they were only trainees, they did not report for work regularly but came in as substitutes to the regular workers or in undertakings that needed extra workers to expedite completion of work. After their training, Zuñiga, Cañete and Lopez were engaged as project employees by the petitioners in their Islacom project in Bohol. Private respondents started on March 15, 1997 until December 1997. Upon the completion of their project, their employment was also terminated. Private respondents received the amount ofP145.00, the minimum prescribed daily wage for Region VII. In July 1997, the amount of P145 was increased to P150.00 by the Regional Wage Board (RWB) and in October of the same year, the latter was increased to P155.00. Sometime in March 1998, Zuñiga and Cañete were engaged again by Lagon as project employees for its PLDT Antipolo, Rizal project, which ended sometime in (sic) the late September 1998. As a consequence, Zuñiga and Cañete’s employment was terminated. For this project, Zuñiga and Cañete received only the wage of P145.00 daily. The minimum prescribed wage for Rizal at that time wasP160.00.

Sometime in late November 1998, private respondents re-applied in the Racitelcom project of Lagon in Bulacan. Zuñiga and Cañete were re-employed. Lopez was also hired for the said specific project. For this, private respondents received the wage of P145.00. Again, after the completion of their project in March 1999, private respondents went home toCebu City.

On May 21, 1999, private respondents for the 4^th time worked with Lagon’s project in Camarin, Caloocan City with Furukawa Corporation as the general contractor. Their contract would expire on February 28, 2000, the period of completion of the project. From May 21, 1997-December 1999, private respondents received the wage of P145.00. At this time, the minimum prescribed rate for Manila was P198.00. In January to February 28, the three received the wage of P165.00. The existing rate at that time was P213.00.

For reasons of delay on the delivery of imported materials from Furukawa Corporation, the Camarin project was not completed on the scheduled date of completion. Face[d] with economic problem[s], Lagon was constrained to cut down the overtime work of its worker[s][,] including private respondents. Thus, when requested by private respondents on February 28, 2000 to work overtime, Lagon refused and told private respondents that if they insist, they would have to go home at their own expense and that they would not be given anymore time nor allowed to stay in the quarters. This prompted private respondents to leave their work and went home to Cebu. On March 3, 2000, private respondents filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13^th month pay for 1997 and 1998 and service incentive leave pay as well as damages and attorney’s fees.

In their answers, petitioners admit employment of private respondents but claimed that the latter were only project employees[,] for their services were merely engaged for a specific project or undertaking and the same were covered by contracts duly signed by private respondents. Petitioners further alleged that the food allowance of P63.00 per day as well as private respondents allowance for lodging house, transportation, electricity, water and snacks allowance should be added to their basic pay. With these, petitioners claimed that private respondents received higher wage rate than that prescribed in Rizal and Manila.

Lastly, petitioners alleged that since the workplaces of private respondents were all in Manila, the complaint should be filed there. Thus, petitioners prayed for the dismissal of the complaint for lack of jurisdiction and utter lack of merit. (Citations omitted.)

On January 18, 2001, Labor Arbiter Reynoso Belarmino (LA) rendered his decision^[5] declaring that his office had jurisdiction to hear and decide the complaint filed by private respondents. Referring to Rule IV, Sec. 1 (a) of the NLRC Rules of Procedure prevailing at that time,^[6] the LA ruled that it had jurisdiction because the “workplace,”  as defined in the said rule, included the place where the employee was supposed to report back after a temporary detail, assignment or travel, which in this case was Cebu.

As to the status of their employment, the LA opined that private respondents were regular employees because they were repeatedly hired by petitioners and they performed activities which were usual, necessary and desirable in the business or trade of the employer.

With regard to the underpayment of wages, the LA found that private respondents were underpaid. It ruled that the free board and lodging, electricity, water, and food enjoyed by them could not be included in the computation of their wages because these were given without their written consent.

The LA, however, found that petitioners were not liable for illegal dismissal.  The LA viewed private respondents’ act of going home as an act of indifference when petitioners decided to prohibit overtime work.^[7]

In its March 31, 2004 Decision, the NLRC affirmed the findings of the LA. In addition, the NLRC noted that not a single report of project completion was filed with the nearest Public Employment Office as required 
by the Department of Labor and Employment (DOLE) Department Order No. 19, Series of 1993.^[8]  The NLRC later denied^[9] the motion for reconsideration^[10] subsequently filed by petitioners.

When the matter was elevated to the CA on a petition for certiorari, it affirmed the findings that the private respondents were regular employees. It considered the fact that they performed functions which were the regular and usual business of petitioners. According to the CA, they were clearly members of a work pool from which petitioners drew their project employees.

The CA also stated that the failure of petitioners to comply with the simple but compulsory requirement to submit a report of termination to the nearest Public Employment Office every time private respondents’ employment was terminated was proof that the latter were not project employees but regular employees.

The CA likewise found that the private respondents were underpaid. It ruled that the board and lodging, electricity, water, and food enjoyed by the private respondents could not be included in the computation of their wages because these were given without their written consent. The CA added that the private respondents were entitled to 13^th month pay.

The CA also agreed with the NLRC that there was no illegal dismissal. The CA opined that it was the petitioners’ prerogative to grant or deny any request for overtime work and that the private respondents’ act of leaving the workplace after their request was denied was an act of abandonment.

In modifying the decision of the labor tribunal, however, the CA noted that respondent Roldan Lopez did not work in the Antipolo project and, thus, was not entitled to wage differentials.  Also, in computing the differentials for the period January and February 2000, the CA disagreed in the award of differentials based on the minimum daily wage of P223.00, as the prevailing minimum daily wage then was only P213.00. Petitioners sought reconsideration but the CA denied it in its March 31, 2006Resolution.^[11]

In this petition for review on certiorari,^[12] petitioners seek the reversal and setting aside of the CA decision anchored on this lone:

GROUND/

ASSIGNMENT OF ERROR

THE PUBLIC RESPONDENT NLRC COMMITTED A SERIOUS ERROR IN LAW IN AWARDING WAGE DIFFERENTIALS TO THE PRIVATE COMPLAINANTS ON THE BASES OF MERE TECHNICALITIES, THAT IS, FOR LACK OF WRITTEN CONFORMITY x x x AND LACK OF NOTICE TO THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE)[,] AND THUS, THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING WITH MODIFICATION THE NLRC DECISION IN THE LIGHT OF THE RULING IN THE CASE OF JENNY M. AGABON and VIRGILIO AGABON vs, NLRC, ET AL., GR NO. 158963, NOVEMBER 17, 2004, 442 SCRA 573, [AND SUBSEQUENTLY IN THE CASE OF GLAXO WELLCOME PHILIPPINES,  INC.  VS.   NAGAKAKAISANG  EMPLEYADO  NG 
WELLCOME-DFA (NEW –DFA), ET AL., GR NO. 149349, 11 MARCH 2005], WHICH FINDS APPLICATION IN THE INSTANT CASE BY ANALOGY.^[13]

Petitioners reiterated their position that the value of the facilities that the private respondents enjoyed should be included in the computation of the “wages” received by them. They argued that the rulings in Agabon v. NLRC^[14]and Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado Ng Wellcome-DFA^[15] should be applied by analogy, in the sense that the lack of written acceptance of the employees of the facilities enjoyed by them should not mean that the value of the facilities could not be included in the computation of the private respondents’ “wages.”

On November 29, 2006, the Court resolved to issue a Temporary Restraining Order (TRO) enjoining the public respondent from enforcing the NLRC and CA decisions until further orders from the Court.

After a thorough review of the records, however, the Court finds no merit in the petition.

This petition generally involves factual issues, such as, whether or not there is evidence on record to support the findings of the LA, the NLRC and the CA that private respondents were project or regular employees and that their salary differentials had been paid. This calls for a re-examination of the evidence, which the Court cannot entertain. Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence.  It is not the Court’s function  to assess and  evaluate  the  evidence

all over again, particularly where the findings of both the Labor tribunals and the CA concur. ^[16]

As a general rule, on payment of wages, a party who alleges payment as a defense has the burden of proving it.^[17]Specifically with respect to labor cases, the burden of proving payment of monetary claims rests on the employer, the rationale being that the pertinent personnel files, payrolls, records, remittances and other similar documents — which will show that overtime, differentials, service incentive leave and other claims of workers have been paid — are not in the possession of the worker but in the custody and absolute control of the employer.^[18]

In this case, petitioners, aside from bare allegations that private respondents received wages higher than the prescribed minimum, failed to present any evidence, such as payroll or payslips, to support their defense of payment.  Thus, petitioners utterly failed to discharge the onus probandi.

Private respondents, on the other hand, are entitled to be paid            the  minimum  wage,  whether  they  are  regular  or non-regular employees. 
Section 3, Rule VII of the Rules to Implement the Labor Code^[19] specifically enumerates those who are not covered by the payment of minimum wage. Project employees are not among them.

On whether the value of the facilities should be included in the computation of the “wages” received by private respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. In such cases, the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the latter, provided that such deduction is with the written authorization of the employees concerned.

Moreover, before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value.^[20]Mere availment is not sufficient to allow deductions from employees’ wages.^[21]

These requirements, however, have not been met in this case. SLL failed to present any company policy or guideline showing that provisions for meals and lodging were part of the employee’s salaries. It also failed to provide proof of the employees’ written authorization, much less show how they arrived at their valuations.  At any rate, it is not even clear whether private respondents actually enjoyed said facilities.

         The Court, at this point, makes a distinction between “facilities” and “supplements.”  It is of the view that the food and lodging, or the electricity and water allegedly consumed by private respondents in this case were not facilities but supplements. In the case of Atok-Big Wedge Assn. v. Atok-Big Wedge Co.,^[22] the two terms were distinguished from one another in this wise:

“Supplements,” therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. “Facilities,” on the other hand, are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given.^[23]  In the case at bench, the items provided were given freely by SLL  for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects.

For said reason, the cases of Agabon and Glaxo are inapplicable in this case.  At any rate, these were cases of dismissal with just and authorized causes. The present case involves the matter of the failure of the petitioners to comply with the payment of the prescribed minimum wage.

The Court sustains the deletion of the award of differentials with respect to respondent Roldan Lopez. As correctly pointed out by the CA, he did not work for the project in Antipolo.

WHEREFORE, the petition is DENIED.  The temporary restraining order issued by the Court on November 29, 2006 is deemed, as it is hereby ordered, DISSOLVED.

SO ORDERED.

JOSE CATRAL MENDOZA

                                                                            Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR.                MARIANO C. DEL CASTILLO  

                 Associate Justice                                 Associate Justice

ROBERTO A. ABAD

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

        ANTONIO T. CARPIO

               Associate Justice

                                                           Chairperson, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                                 RENATO C. CORONA

                                                                            Chief Justice

^*  Designated as additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Special Order No. 933 dated January 24, 2011.

^**  Designated as additional member in lieu of Associate Justice Diosdado M. Peralta per Special Order No. 954 dated February 21, 2011.

^[1]  Rollo, pp. 48-60. Penned by Associate Justice Vicente L. Yap and concurred in by Associate Justice Arsenio J. Magpale and Associate Justice Apolinario D. Bruselas, Jr.

^[2]   Id. at 62-63.

^[3] Id. at 155-164.

^[4] Id. at 171-172.

^[5] Id. at 123-134.

^[6] Section 1. Venue. — (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complaint/petitioner.

For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to, their employers.

^[7] Rollo, p. 130.

^[8]  2.2     Indicators of project employment. – Either one or more of the following circumstances, among other, may be considered as indicators that an employee is a project employee.

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies.

^[9]   Rollo, pp. 171-172.

^[10] Id. at 165-170.

^[11] Id. at 62-63.

^[12] Id. at 10-172.

^[13] Id. at 22.

^[14] 485 Phil. 248 (2004).

^[15] 493 Phil.410 (2005).

^[16] Stamford Marketing Corp. v. Julian, 468 Phil 34 (2004).

^[17] Far East Bank and Trust Company v. Querimit, 424 Phil. 721 (2002);  Sevillana v. I.T. (International) Corp., 408 Phil. 570 (2001); Villar v. National Labor Relations Commission,387 Phil. 706 (2000);  Audion Electric Co, Inc. v. NLRC, 367 Phil. 620 (1999);  Ropali Trading Corporation v. National Labor Relations Commission, 357 Phil. 314 (1998); National Semiconductor (HK) Distribution, Ltd. v. National Labor Relations Commission (4^th Division), 353 Phil. 551 (1998); Pacific Maritime Services, Inc. v. Ranay, 341 Phil. 716 (1997); Jimenez v. National Labor Relations Commission, 326 Phil. 89 (1996);  Philippine National Bank v. Court of Appeals, 326 Phil. 46 (1996); Good Earth Emporium, Inc. v. Court of Appeals, G.R. No. 82797, February 27, 1991, 194 SCRA 544, 552; Villaflor v. Court of Appeals, G.R. No. 46210, December 26, 1990, 192 SCRA 680, 690; Biala v. Court of Appeals, G.R. No. 43503, October 31, 1990, 191 SCRA 50, 59;  Servicewide Specialists, Inc. v. Intermediate Appellate Court, 255 Phil. 787 (1989).

^[18] Dansart Security Force & Allied Services Company v. Bagoy, G.R. No.  168495, July 2, 2010; G & M Philippines, Inc. v. Cruz, 496 Phil. 119 (2005); Villar v. National Labor Relations Commission, 387 Phil. 706.

^[19] Sec. 3. Coverage. – This Rule shall not apply to the following persons:

(a)                 Household or domestic helpers, including family drivers and persons in the personal service of another;

(b)            Homeworkers who are engaged in needlework;

(c)                 Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority in accordance with R.A. 3470, provided that such workers perform the work in their respective homes;

(d)                Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the Secretary of Labor; Provided, however, That such recommendation shall be given only for the purpose of making the cooperative viable and upon finding and certification of said Bureau, supported by adequate proof, that the cooperative cannot resort to other remedial measures without serious loss or prejudice to its operation except through its exemption from the requirements of this Rule. The exemption shall be subject to such terms and conditions and for such period of time as the Secretary of Labor may prescribe.

^[20] Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, 492 Phil. 892 (2005); Mabeza v. NLRC, 338 Phil. 386 (1997).

^[21] Mayon Hotel & Restaurant v. Adana, supra.

^[22] 97 Phil. 294 (1955).

^[23] States Marine Corporation and Royal Line, Inc. v. Cebu Seamen’s Association, Inc., 117 Phil. 307 (1963).

CASE NO. 2011-0073: SOUTH PACIFIC SUGAR CORPORATION AND SOUTH EAST ASIA SUGAR MILL CORPORATION VS. COURT OF APPEALS AND SUGAR REGULATORY ADMINISTRATION (G.R. NO. 180462, 9 FEBRAURY 2011, CARPIO, J.)  SUBJECTS: DEPUTIZATION OF COUNSEL BY OSG; CONVERSION FEE BID; RTC CANT DEPART FROM PLAIN AND EXPRESS LANGUAGE. (BRIEF TITLE: SOUTH PACIFIC SUGAR ET AL VS. CA ET AL).

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review on certiorari¹ of the 6 November 2007 Decision² of the Court of Appeals in CA-G.R. SP No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders³ as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236.

The Facts

In 1999, the government projected a shortage of some 500,000 metric tons of sugar due to the effects of El Niño and La Niña phenomena. To fill the expected shortage and to ensure stable sugar prices, then President Joseph Ejercito Estrada issued Executive Order No. 87, Series of 1999 (EO 87),⁴ facilitating sugar importation by the private sector.

Section 2 of EO 87 created a Committee on Sugar Conversion/Auction to determine procedures for sugar importation as well as for collection and remittance of conversion fee.

Under Section 3 of EO 87, sugar conversion is by auction and is subject to conversion fee to be remitted by respondent Sugar Regulatory Administration (SRA) to the Bureau of Treasury.

On 3 May 1999, the Committee on Sugar Conversion/Auction issued the Bidding Rules providing guidelines for sugar importation. Under the Bidding Rules, the importer pays 25% of the conversion fee within three working days from receipt of notice of the bid award and the 75% balance upon arrival of the imported sugar.

The Bidding Rules also provide that if the importer fails to make the importation or if the imported sugar fails to arrive on or before the set arrival date, 25% of the conversion fee is forfeited in favor of the SRA, to wit:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported sugar shall not be classified as “B” (domestic sugar) unless, upon application with the SRA and without objection of the Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the shipment.⁵ (Emphasis supplied)

The SRA forthwith authorized the importation of 300,000 metric tons of sugar, to be made in three tranches, as follows:

Tranche Volume Arrival Date

1^st 100,000MT 15 May-15 June 1999

2^nd 100,000MT 15 June-July 15 1999

3^rd 100,000MT 15 July-15 August 1999⁶

The Committee on Sugar Conversion/Auction caused the publication of the invitation to bid. Several sugar importers submitted sealed bid tenders. Petitioners Southeast Asia Sugar Mill Corporation (Sugar Mill) and South Pacific Sugar Corporation (Pacific Sugar) emerged as winning bidders for the 1^st, 2^nd, and 3^rd tranches.

For the 3^rd tranche, Sugar Mill submitted the winning bid of P286.80 per 50 kilogram for 10,000 metric tons of sugar, while Pacific Sugar submitted the winning bid of P285.99 per 50 kilogram for 20,000 metric tons of sugar, for a combined total volume of 30,000 metric tons of sugar.

Pursuant to the Bidding Rules, Sugar Mill paid 25% of the conversion fee amounting to P14,340,000.00, while Pacific Sugar paid 25% of the conversion fee amounting to P28,599,000.00.

As it turned out, Sugar Mill and Pacific Sugar (sugar corporations) delivered only 10% of their sugar import allocation, or a total of only 3,000 metric tons of sugar. They requested the SRA to cancel the remaining 27,000 metric tons of sugar import allocation blaming sharp decline in sugar prices. The sugar corporations sought immediate reimbursement of the corresponding 25% of the conversion fee amounting to P38,637,000.00.

The SRA informed the sugar corporations that the conversion fee would be forfeited pursuant to paragraph G.1 of the Bidding Rules. The SRA also notified the sugar corporations that the authority to reconsider their request for reimbursement was vested with the Committee on Sugar Conversion/Auction.

On 26 February 2002, the sugar corporations filed a complaint for breach of contract and damages in the Regional Trial Court (Branch 77) of Quezon City, docketed as Civil Case No. Q-02-46236.

In its notice of appearance,⁷ the Office of the Solicitor General (OSG) deputized Atty. Raul Labay of the SRA’s legal department to assist the OSG in this case, thus:

Please be informed that Atty. Raul M. Labay has been authorized to appear in this case, and therefore, should also be furnished with notices of hearings, orders, resolutions, decisions, and other processes. However, as the Solicitor General retains supervision and control of the representation in this case and has to approve withdrawal of the case, non-appeal, or other actions which appear to compromise the interests of the Government, only notices of orders, resolutions, and decisions served on him will bind the party represented.⁸

The Ruling of the RTC

The RTC held that paragraph G.1 of the Bidding Rules contemplated delay in the arrival of imported sugar, not cancellation of sugar importation. It concluded that the forfeiture provision did not apply to the sugar corporations which merely cancelled the sugar importation. In its 19 December 2006 Decision,⁹ the RTC ruled, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, ORDERING the defendant Sugar Regulatory Administration to pay plaintiffs the amount of P38,637,000.00 as reimbursement of 25% of the conversion fee they paid in 1999. The claim for legal interests, compensatory damages, exemplary damages, and attorney’s fees is hereby DENIED.

SO ORDERED.¹⁰

On 5 January 2007, the OSG received its copy of the RTC Decision.¹¹ On 24 January 2007, the deputized SRA counsel, Atty. RaulLabay, received his own copy of the Decision and filed a notice of appeal on 7 February 2007.¹²

The sugar corporations moved to expunge the notice of appeal on the ground that only the OSG, as the principal counsel, can decide whether an appeal should be made. The sugar corporations stressed that a lawyer deputized by the OSG has no authority to decide whether an appeal should be made.

The OSG filed its opposition¹³ to the motion to expunge the notice of appeal. The OSG pointed out that in its notice of appearance,¹⁴ it authorized SRA counsel Atty. Labay to assist the OSG in this case.

In its 26 June 2007 Order, the RTC granted the motion to expunge the notice of appeal. The OSG moved for reconsideration stressing that the OSG ratified Atty. Labay’s filing of a notice of appeal. The RTC, in its 6 August 2007 Order, denied the OSG’s motion for reconsideration.

In its 31 August 2007 Order, the RTC granted the sugar corporations’ motion for execution, to wit:

WHEREFORE, premises considered, the plaintiffs’ motion for execution is hereby granted. Accordingly, issue a writ of execution for the enforcement of the decision rendered in this case.

SO ORDERED.¹⁵

Accordingly, the RTC issued on 6 September 2007 a Writ of Execution and on 12 September 2007 an Amended Writ of Execution.

Aggrieved, the SRA filed in the Court of Appeals a petition for certiorari under Rule 65 seeking to set aside the RTC’s 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution.

The Ruling of the Court of Appeals

The Court of Appeals held that the deputized SRA counsel had authority to file a notice of appeal. The appellate court thus directed the RTC to give due course to the appeal that Atty. Labay timely filed. The decretal part of its 6 November 2007 Decision reads:

WHEREFORE, premises considered, the present petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly GRANTED. The Orders dated June 26, 2007, August 6, 2007, and August 31, 2007, as well as the Writ of Execution dated September 6, 2007 and Amended Writ of Execution dated September 12, 2007 issued in Civil Case No. Q-02-46236 of the Regional Trial Court of Quezon City, Branch 77 are hereby all ANNULLED and SET ASIDE. Said court is hereby DIRECTED to GIVE DUE COURSE to the Notice of Appeal dated February 7, 2007 filed by Atty. Raul M. Labay in behalf of petitioner Sugar Regulatory Administration.

No pronouncement as to costs.

SO ORDERED.¹⁶

Dissatisfied with the decision of the Court of Appeals, the sugar corporations filed in this Court a petition for review on certiorari.

The Issues

The issues are (1) whether a deputized SRA counsel may file a notice of appeal and (2) whether the sugar corporations are entitled to reimbursement of P38,637,000.00 in conversion fee.

The Court’s Ruling

The petition lacks merit.

The sugar corporations contend that the deputized SRA counsel, Atty. Labay, was not authorized to file a notice of appeal; that the OSG, as the principal counsel, had the sole authority to file a notice of appeal; that certiorari may not be interposed as a substitute for the lost remedy of appeal; and that the subject conversion fee amounting to P38,637,000.00 remained as private funds in view of its summary forfeiture and as such, it could not be deemed part of public funds.

The OSG counters that assuming Atty. Labay had no authority to file the notice of appeal, the defect was cured when the OSG subsequently filed its opposition to the sugar corporations’ motion to expunge the notice of appeal. The OSG claims that if the denial of the appeal is sustained, the SRA would no longer have a remedy to assail the RTC decision adjudging it liable to reimburse the sugar corporations P38,637,000.00 in conversion fee despite the admitted failure of the sugar corporations to comply with their contractual undertaking to import sugar.

The deputized SRA counsel may file a notice of appeal.

Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987¹⁷ authorizes the OSG to represent the SRA, a government agency established pursuant to Executive Order No. 18, Series of 1986,¹⁸ in any litigation, proceeding, investigation, or matter requiring the services of lawyers. It provides:

SEC. 35. Powers and Functions. – The Office of the Solicitor General shall represent the Government of the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter requiring the services of lawyers. When authorized by the President or head of the office concerned, it shall also represent government owned or controlled corporations. The Office of the Solicitor General shall constitute the law office of the Government and, as such, shall discharge duties requiring the services of lawyers. (Emphasis supplied)

The OSG is empowered to deputize legal officers of government departments, bureaus, agencies, and offices in cases involving their respective offices. Paragraph 8 of the same section reads:

(8) Deputize legal officers of government departments, bureaus, agencies, and offices to assist the Solicitor General and appear or represent the Government in cases involving their respective offices, brought before the courts and exercise supervision and control over such legal officers with respect to such cases. (Emphasis supplied)

In National Power Corporation v. Vine Development Corporation,¹⁹ this Court ruled that the deputization by the OSG of NAPOCOR counsels in cases involving the NAPOCOR included the authority to file a notice of appeal. The Court explained that the OSG could have withdrawn the appeal if it believed that the appeal would not advance the government’s cause. The Court held that even if the deputized NAPOCOR counsel had no authority to file a notice of appeal, the defect was cured by the OSG’s subsequent manifestation that the deputized NAPOCOR counsel had authority to file a notice of appeal.

The sugar corporations’ reliance on another NAPOCOR case, National Power Corporation v. NLRC,²⁰ is misplaced. There, service of the decision was never made on the OSG, the principal counsel for NAPOCOR. Only the deputized NAPOCOR counsel was served a copy of the decision. Hence, the Court held that the period to appeal the decision did not commence to run. The Court explained that service of the decision on the deputized NAPOCOR counsel was insufficient and not binding on the OSG. This was why the Court stated in that case that the deputized NAPOCOR counsel had no authority to decide whether an appeal should be made.

Noteworthy, in National Power Corporation v. Vine Development Corporation, both the OSG and the deputized NAPOCOR counsel were served copies of the decision subject of the appeal. In National Power Corporation v. NLRC, only the deputized NAPOCOR counsel was furnished a copy of the appealed decision. Hence, the differing rulings by this Court.

In the present case, records show that both the OSG and the deputized SRA counsel were served copies of the RTC decision subject of the appeal. Thus, what applies is National Power Corporation v. Vine Development Corporation. Applying here the doctrine laid down in the said case, deputized SRA counsel Atty. Labay is, without a doubt, authorized to file a notice of appeal.

Assuming Atty. Labay had no authority to file a notice of appeal, such defect was cured when the OSG subsequently filed its opposition to the motion to expunge the notice of appeal. As the OSG explained, its reservation²¹ to “approve the withdrawal of the case, the non-appeal, or other actions which appear to compromise the interest of the government” was meant to protect the interest of the government in case the deputized SRA counsel acted in any manner prejudicial to government. Obviously, what required the approval of the OSG was the non-appeal, not the appeal, of a decision adverse to government.

We hold that the RTC should have given due course to the notice of appeal that Atty. Labay timely filed. Thus, the 19 December 2006 Decision of the RTC in Civil Case No. Q-02-46236 cannot be deemed to have attained finality.

The next logical step is to remand the case to the RTC. However, a remand would only delay the resolution of this case and frustrate the ends of justice. As a rule, remand is avoided in the following instances: (a) where the ends of justice would not be served; (b) where public interest demands an early disposition of the case; or (c) where the trial court already received all the evidence presented by both parties, and the Supreme Court is in a position, based upon said evidence, to decide the case on its merits.²² All three conditions are present here.

The sugar corporations are not entitled to reimbursement

of 25% of the conversion fee amounting to P38,637,000.00.

Section 2 of EO 87 granted the Committee on Sugar Conversion/Auction power to promulgate rules governing sugar importation by the private sector. It provides:

SEC. 2. Committee on Sugar Conversion/Auction. – There is hereby created a Committee on Sugar Conversion/Auction which shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and a representative each from the sugar planters’ group and the sugar millers’ group. The Committee is hereby authorized to determine the parameters and procedures on the importation of sugar by the private sector, and the collection and remittance of the fee for the conversion of sugar from “C” (reserve sugar) to “B” (domestic sugar). (Emphasis supplied)

Pursuant to this authority, the Committee issued the Bidding Rules subject of the controversy, paragraph G.1 of which provides that if the importer fails to make the importation, 25% of the conversion fee shall be forfeited in favor of the SRA, thus:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported sugar shall not be classified as “B” (domestic sugar) unless, upon application with the SRA and without objection of the Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the shipment.²³ (Emphasis supplied)

In joining the bid for sugar importation, the sugar corporations are deemed to have assented to the Bidding Rules, including the forfeiture provision under paragraph G.1. The Bidding Rules bind the sugar corporations. The latter cannot rely on the lame excuse that they are not aware of the forfeiture provision.

At the trial, Teresita Tan testified that the Bidding Rules were duly published in a newspaper of general circulation.²⁴ Vicente Cenzon, a sugar importer who participated in the bidding for the 3^rd tranche, testified that he attended the pre-bid conference where the Bidding Rules were discussed and copies of the same were distributed to all the bidders.²⁵

On the other hand, all that the sugar corporations managed to come up with was the self-serving testimony of its witness, DanielFajardo, that the sugar corporations were not informed of the forfeiture provision in the Bidding Rules.²⁶

The Bidding Rules passed through a consultative process actively participated by various government agencies and their counterpart in the private sector: the Department of Agriculture, the National Economic Development Authority, the Department of Trade and Industry, the Department of Finance, the Sugar Regulatory Administration, and a representative each from the sugar planters’ group and the sugar millers’ group.²⁷

We find nothing in the forfeiture provision of the Bidding Rules that is contrary to law, morals, good customs, public order, or public policy. On the contrary, the forfeiture provision fully supports government efforts to aid the country’s ailing sugar industry. Conversion fees, including those that are forfeited under paragraph G.1 of the Bidding Rules, are automatically remitted to the Bureau of Treasury and go directly to the Agricultural Competitiveness Enhancement Fund.²⁸

It is unrefuted that the sugar corporations failed in their contractual undertaking to import the remaining 27,000 metric tons of sugar specified in their sugar import allocation. Applying paragraph G.1 of the Bidding Rules, such failure is subject to forfeiture of the 25% of the conversion fee the sugar corporations paid as part of their contractual undertaking.

The RTC gravely erred in ordering the SRA to return the forfeited conversion fee to the sugar corporations. Its strained interpretation that paragraph G.1 of the Bidding Rules contemplates cases of delay in the arrival of imported sugar but not cases of cancellation of sugar importation defies logic and the express provision of paragraph G.1. If delay in the arrival of imported sugar is subject to forfeiture of 25% of the conversion fee, with more reason is outright failure to import sugar, by cancelling the sugar importation altogether, subject to forfeiture of the 25% of the conversion fee.

Plainly and expressly, paragraph G.1 identifies two situations which would bring about the forfeiture of 25% of the conversion fee: (1)when the importer fails to make the importation or (2) when the imported sugar fails to arrive in the Philippines on or before the set arrival date. It is wrong for the RTC to interpret the forfeiture provision in a way departing from its plain and express language.

Where the language of a rule is clear, it is the duty of the court to enforce it according to the plain meaning of the word. There is no occasion to resort to other means of interpretation.²⁹

WHEREFORE, we DENY the petition. We AFFIRM the 6 November 2007 Decision of the Court of Appeals in CA-G.R. SP No. 100571, which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236. Further, the 19 December 2006 Decision of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236 is SET ASIDE.

Costs against petitioners.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

ANTONIO EDUARDO B. NACHURA

Associate Justice

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE C. MENDOZA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

1 Under Rule 45 of the Rules of Court.

2 Rollo, pp. 49-66. Penned by then Associate Justice Martin S. Villarama, Jr., now a Member of this Court, with Associate Justices Noel G. Tijam and Sesinando E. Villon, concurring.

3 Id. at 102-103, 104-105, and 106.

4 Effective 1 April 1999.

5 Rollo, p. 50.

6 Id. at 68.

7 Id. at 110-111. Dated 17 March 2003.

8 Id. at 110.

9 Id. at 67-76.

10 Id. at 76.

11 Id. at 91.

12 Id. at 52.

13 Id. at 93-100.

14 Id. at 95.

15 Id. at 106.

16 Id. at 65-66.

17 Otherwise known as Executive Order No. 292.

18 Creating a Sugar Regulatory Administration. Effective 28 May 1986.

19 394 Phil. 76 (2000).

20 339 Phil. 89 (1997).

21 In its Notice of Appearance dated 17 March 2003.

22 Dela Peña v. Court of Appeals, G.R. No. 177828, 13 February 2009, 579 SCRA 396.

23 Rollo, p. 50.

24 Id. at 73.

25 Id. at 71.

26 Id. at 73.

27 Section 2, EO 87.

SEC. 2. Committee on Sugar Conversion/Auction. – There is hereby created a Committee on Sugar Conversion/Auction which shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and representative each from the sugar planters’ group and the sugar millers’ group. The Committee is hereby authorized to determine the parameters and procedures on the importation of sugar by the private sector, and the collection and remittance of the fee for the conversion of sugar from “C” to “B”.

28 Section 3, EO 87.

SEC. 3. Conduct of Auction for Sugar Conversion. – x x x The “Conversion Fee” shall be remitted to the Bureau of Treasury and may be used to pay the arrears of government in the Agricultural Competitiveness Enhancement Fund.

29 Del Mar v. PAGCOR, 411 Phil. 430 (2001).

CASE NO. 2011-0072: F.A.T. KEE COMPUTER SYSTEMS, INC. VS. ONLINE NETWORKS INTERNATIONAL, INC. (G.R. NO. 171238, 2 FEBRUARY 2011, LEONARDO – DE CASTRO, J.) SUBJECTS: FAILURE TO ATTACH TSNs TO PETITION; QUESTION OF FACT VIS A VIS QUESTION OF LAW. (BRIEF TITLE: F.A.T. KEE VS. ONLINE).

Republic of the Philippines 

Supreme Court

Manila

FIRST DIVISION

x- – – – – – – – – – – – – – – – – – – – – – – – – – –  – – – – – – – – – – – – – – – – – – – – – -x

D E C I S I O N

LEONARDO – DE CASTRO, J.:

          For consideration of the Court is a Petition for Review on Certiorari^[1] under Rule 45 of the Rules of Court, which seeks to challenge the Decision^[2] dated September 26, 2005 of the Court of Appeals in CA-G.R. CV No. 71910.  The appellate court reversed and set aside the Decision^[3] dated November 7, 2000 of the Regional Trial Court (RTC) of Makati City, Branch 148, in Civil Case No. 99-167, which dismissed the complaint filed by herein respondent Online Networks International, Inc. (ONLINE).

          Petitioner F.A.T. Kee Computer Systems, Inc. (FAT KEE) is a domestic corporation engaged in the business of selling computer equipment and conducting maintenance services for the units it sold.

ONLINE is also a domestic corporation principally engaged in the business of selling computer units, parts and software.

          On January 25, 1999, ONLINE filed a Complaint^[4] for Sum of Money against FAT KEE docketed as Civil Case No. 99-167.  ONLINE alleged that sometime in November 1997, it sold computer printers to FAT KEE for which the latter agreed to pay the purchase price of US$136,149.43.  The agreement was evidenced by Invoice Nos. 4680, 4838, 5090 and 5096^[5] issued by ONLINE to FAT KEE.  The invoice receipts contained a stipulation that “interest at 28% per annum is to be charged on all accounts overdue” and “an additional sum equal to 25% of the amount will be charged by vendor for attorney’s fees plus cost of collection in case of suit.”^[6]  It was further asserted in the Complaint that thereafter, FAT KEE, through its President Frederick Huang, Jr., offered to pay its US dollar obligations in Philippine pesos using the exchange rate of P40:US$1.  ONLINE claimed to have duly accepted the offer.  The amount payable was then computed at P5,445,977.20.  FAT KEE then made several payments amounting to P2,502,033.06 between the periods of March and May 1998.^[7]  As of May 12, 1998, the balance of FAT KEE purportedly amounted to P2,943,944.14.  As the obligations of FAT KEE matured in December 1997, ONLINE applied the 28% interest on the unpaid amount.  However, in view of the good business relationship of the parties, ONLINE allegedly applied the interest on the balance for a period of three months only.  Thus, the total amount due, plus interest, was P3,012,636.17.^[8]  FAT KEE subsequently made additional payments in the amount of P2,256,541.12.  A balance of P756,095.05, thus, remained according to ONLINE’s computations.  Despite repeated demands, FAT KEE failed to pay its obligations to ONLINE without any valid reason.  ONLINE was allegedly constrained to send a final demand letter for the payment of the aforementioned balance.  As FAT KEE still ignored the demand, ONLINE instituted the instant case, praying that FAT KEE be ordered to pay the principal amount of P756,095.05, plus 28% interest per annum computed from July 28, 1998 until full payment.  ONLINE likewise sought the payment of 25% of the total amount due as attorney’s fees, as well as litigation expenses and costs of suit.

          FAT KEE duly answered^[9] the complaint alleging, inter alia, that it did not reach an agreement with ONLINE for the payment of its obligations in US dollars.  FAT KEE claimed that the invoice receipts of the computer printers, which quoted the purchase price in US dollars, were unilaterally prepared by ONLINE.  While FAT KEE admitted that it offered to pay its obligations in Philippine pesos, it averred that the amount owing to ONLINE was only P5,067,925.34, as reflected in the Statement of Account (SOA) sent by ONLINE dated December 9, 1997.^[10]  FAT KEE stated that payments in Philippine pesos were tendered to ONLINE, in accordance with the SOA, and the latter accepted the same.  FAT KEE denied that it agreed to the conversion rate ofP40:US$1 and claimed that it had already fully paid its total obligations to ONLINE.  FAT KEE, thus, prayed for the dismissal of the complaint and, by way of counterclaim, sought the payment of P250,000.00 as attorney’s fees.

          The trial of the case ensued thereafter.

          ONLINE first called Peter Jeoffrey Goco to the witness stand.  Goco testified that he was the Legal Officer of ONLINE, whose duty was to monitor the outstanding or unpaid accounts of ONLINE’s clients, as well as to send demand letters and recommend the filing of cases should the clients fail to pay.^[11]  FAT KEE was one of the clients of ONLINE, which had an outstanding balance of a little over P756,000.00.^[12]  Goco stated that the invoice receipts sent to FAT KEE were denominated in US dollars as the business of ONLINE was to sell imported computer products, in wholesale and retail.  In view of the currency fluctuations during those times, ONLINE deemed that the better business policy was to bill their clients in US dollars.^[13]  FAT KEE allegedly had an outstanding balance of roughly around US$136,000.00.^[14]  When ONLINE demanded payment, FAT KEE negotiated that it be allowed to pay in Philippine pesos. Goco attested that the parties subsequently agreed to a conversion rate ofP40:US$1.  FAT KEE was able to remit partial payments to ONLINE, but as of May 1998, the amount of P756,095.05 remained unpaid.^[15]  As FAT KEE failed to settle its obligations, ONLINE included the payment of interests on the latter’s claim.^[16]  FAT KEE then sent a letter to ONLINE, insisting that there was no agreement as to the exchange rate to be used in converting the unpaid obligations of FAT KEE and that the latter could not pay because of the extraordinary currency fluctuations.^[17]  The lawyers of ONLINE eventually sent a demand letter^[18] to FAT KEE for the payment of the outstanding balance, but this too went unheeded. ONLINE, thus, filed the instant case.^[19]

          The next witness to be presented by ONLINE was James Payoyo, an Account Manager for the said company.  Payoyo testified, among others, that sometime in November 1997, FAT KEE submitted their Purchase Order^[20] for Hewlett Packard computers and printers, which was quoted in US dollars.^[21]  Prior to this, FAT KEE likewise sent ONLINE a Purchase Order^[22]dated October 23, 1997 and the same was denominated in US dollars.^[23]  Payoyo related that, on January 15, 1998, the officials of ONLINE met with Frederick Huang, Jr., the President of FAT KEE, and the latter’s lawyer.  The parties discussed the payment scheme for the outstanding balance of FAT KEE.  ONLINE proposed that the total unpaid amount of more than US$136,000.00 shall be divided in two, such that 50% of the amount was to be paid in US dollars and the other half was to be settled in Philippine pesos.  The exchange rate to be applied to the Philippine peso component was P41:US$1.^[24]  FAT KEE then offered to renegotiate the exchange rate, offering to pay P35:US$1, but ONLINE rejected the same.  According to Payoyo, the parties subsequently agreed to a P40:US$1 conversion rate.^[25]

          Lastly, ONLINE called on Sonia Magpili to likewise testify to the fact that FAT KEE renegotiated with ONLINE for the conversion rate of P40:US$1.  Magpili stated that she was then the Executive Vice President of ONLINE^[26] and was among the company officials who met with FAT KEE President Huang on January 15, 1998.^[27]  Discussed in the meeting was the proposal to split the payment to be made by FAT KEE.^[28]  Frederick Huang, Jr. subsequently called the office of ONLINE to request for the lowering of the exchange rate to P40:US$1, to which ONLINE agreed.^[29]  FAT KEE made partial payments from March 1998, but later tried to negotiate again for a lower exchange rate.  Magpili testified that ONLINE no longer agreed to this proposal as the account of FAT KEE had already fallen due as of December 1997.^[30]  On cross-examination, however, Magpili admitted that FAT KEE did not execute any written confirmation to signify its agreement to the proposal to split its outstanding balance and the conversion rate of P40:US$1.^[31]   

          FAT KEE, afterwards, presented its testimonial evidence, calling forth Frederick Huang, Jr. to the witness stand.  Pertinently, Huang testified that the exchange rate they used in order to compute their total unpaid obligation to ONLINE was P34:US$1. Huang explained that this figure was arrived at by taking into account the SOA dated December 9, 1997.  Therein, the unpaid dollar amounts in the assailed Invoice Nos. 4680 and 4838^[32] were denominated in Philippine pesos as P2,343,414.33 andP1,502,033.06, respectively.  A simple computation^[33] then revealed that the rate of exchange rate thereon was P34:US$1.^[34] FAT KEE also applied the said rate on Invoice Nos. 5090 and 5096,^[35] such that the dollar amounts stated thereon were respectively converted to P384,107.52 and P466,480.00.       

Huang also stated that FAT KEE quoted in US dollars the Purchase Order dated November 26, 1997, since the same was upon the instructions of Payoyo.  During that time, the fluctuations of the Philippine peso were rapid and the Accounting Department of ONLINE informed Huang that the computer equipment ordered by FAT KEE would not be delivered unless FAT KEE issued a Purchase Order in US dollars.  Huang also said that there was no agreement between FAT KEE and ONLINE for the payment in US dollars, nor did the parties agree to a specific exchange rate.^[36]  On January 15, 1998, the parties met, but they failed to reach any agreement regarding the exchange rate and the payment in US dollars.  The next day, ONLINE, through Payoyo, wrote a letter to FAT KEE, confirming their supposed agreement on an exchange rate of P41:US$1.^[37]  On February 23, 1998, Payoyo again wrote to Huang, informing him that the new exchange rate to be applied was P40:US$1.  On March 2, 1998, Huang communicated to Payoyo, stating that the Board of Directors of FAT KEE agreed to settle the outstanding balance of the company at the rate of P37:US$1.^[38]  Huang then testified that FAT KEE continued to pay its obligation in Philippine pesos until its obligation was fully paid.^[39]  Later, FAT KEE received demand letters from ONLINE, directing the former to pay the amount ofP756,095.05.^[40] 

          Mayumi Huang also testified for FAT KEE.  Being the Operations Manager^[41] of FAT KEE, she admitted that she was the one who issued the Purchase Order dated November 26, 1997 to ONLINE for $13,720.00.^[42]

          As rebuttal evidence, ONLINE offered the testimony of Melissa Tan to prove that the SOA dated December 9, 1997 that was purportedly issued by ONLINE was in fact unauthorized and FAT KEE was duly informed of the same.  Tan stated that she was the Credit and Collection Supervisor for ONLINE.^[43]  Sometime in December 1997, Magpili showed her a copy of the SOA dated December 9, 1997, asking Tan if she approved the said document.  Tan declared that she did not issue the SOA, nor was she even aware of its issuance.^[44]  Tan explained that the absence of her signature on the SOA meant that the same was not authorized by ONLINE.  The standard procedure was for Tan to review and approve such documents first before the same were issued.^[45]  Tan noted that the SOA was prepared by Edwin Morales, an Accountant of ONLINE.  When confronted about the SOA, Morales reasoned that he merely wanted to give FAT KEE an initial computation of the latter’s outstanding balance, but he mistakenly included the billings that were denominated in US dollars.^[46]  At the meeting between ONLINE and FAT KEE on January 15, 1998, the latter was informed that the SOA was not official and the parties negotiated the applicable conversion rate.^[47]  Upon cross-examination, Tan revealed that ONLINE did not rectify or correct the entries contained in the SOA.  No disciplinary action was likewise taken against Morales for the unauthorized issuance of the said document.^[48]

          Finally, FAT KEE presented the testimony of Frederick Huang, Jr. as surrebuttal evidence.  Huang again maintained that the parties failed to reach an agreement as regards the payment of FAT KEE’s obligations to ONLINE, as well as the proposal to apply the exchange rate of P37:US$1.^[49]     

          In a Decision dated November 7, 2000, the RTC dismissed the complaint of ONLINE, ratiocinating thus:

After assessing the evidence presented by both parties, the court is of the belief that [ONLINE] failed to establish its claim against [FAT KEE].  While indeed [FAT KEE] purchased computer printers from [ONLINE], [the latter] has not established the fact that at the time when the obligation became due and demandable, there was an agreement as to the conversion rate between [ONLINE] and [FAT KEE] as to the rate of exchange from US dollars into Philippine Peso in the payment of purchase price of printers.  When there is no agreement between [ONLINE] and [FAT KEE] as to the rate of exchange from US dollars to Philippine peso, while it is correct to say that it is the prevailing rate of exchange at the time when the obligation became due and demandable, the prevailing rate should be used that prevailing rate, is the rate pegged by [ONLINE], which was contained in the Statement of Account dated 9 December 1997.

x x x Edwin Morales in the Statement of Account he sent to [FAT KEE] dated 9 December 1997 computed the obligation of [FAT KEE] in Philippine currency and after computing the total obligation, by simple mathematical computation, it appears indeed that the exchange rate used by [ONLINE] is PHP34.00 for every US$1.00.  [ONLINE], therefore, is estopped from claiming that the rate of exchange rate should be at the rate of either PHP41.50 or PHP40.00 per US$1.00, as the rate which [ONLINE] itself used is PHP34.00 for every US$1.00 by [ONLINE’s] own computation.  [FAT KEE] even paid an excess of PHP62,539.24.

Considering that [FAT KEE] have fully paid the amount and there being really no dispute as to the exchange rate by [ONLINE’s] own admission in its Statement of Account dated 9 December 1997, it is but proper to consider that [FAT KEE] has fully paid its obligation with [ONLINE] as evidenced by various receipts presented during the trial.

x x x x

With all these, considering that [ONLINE] failed to prove through preponderance of evidence its claim against [FAT KEE] and therefore [ONLINE’s] complaint must be dismissed.

However, [FAT KEE] in its counterclaim claimed among others that [FAT KEE] is entitled to attorney’s fees in the amount ofP250,000.00.  It having been satisfactorily proven by [FAT KEE] that [it] is entitled to attorney’s fees, the court, in its discretion, awards to [FAT KEE] the amount of PHP100,000.00 for and as attorney’s fees, which [ONLINE] must pay to [FAT KEE] considering that the claim of [ONLINE] is incorrect and its complaint baseless.

WHEREFORE, premises considered, [judgment] is hereby rendered in favor of [FAT KEE] and as against [ONLINE].  As a consequence, [ONLINE’s] Complaint is dismissed, and [ONLINE] is therefore adjudged to pay [FAT KEE] the amount of P100,000.00 for and as attorney’s fees.

Costs against [ONLINE].^[50]

          On February 20, 2001, ONLINE filed a Motion for Reconsideration^[51] of the above decision.  ONLINE argued that estoppel may not be invoked against it as FAT KEE did not act or rely on the representations in the SOA dated December 9, 1997. ONLINE maintained that FAT KEE was informed that the SOA was erroneous and unauthorized and the parties subsequently met and negotiated on the exchange rate to be applied.  Likewise, ONLINE challenged the award of attorney’s fees in favor of FAT KEE.

          In an Order dated July 25, 2001, the RTC denied ONLINE’s motion for lack of merit.  Said the RTC:

The principle of Estoppel properly applies to [ONLINE] brought about by the Statement of Account dated December 9, 1997 which was sent to [FAT KEE] through [ONLINE’s] own collection clerk employee, Mr. Edwin Morales.  While, indeed, there is no exchange rate agreed upon between [ONLINE] and [FAT KEE], [the latter] actually made payments using the exchange rate of P34 for every US dollar after the Statement of Account dated December 9, 1997 was received by [FAT KEE].  Neither was there any formal action to correct the alleged unauthorized Statement of Account received by [FAT KEE] nor was the employee, Mr. Edwin Morales meted appropriate disciplinary action for the acts.  On the contrary, it was only during the rebuttal stage of the case when [ONLINE] tried to rectify the alleged mistake committed and not at the time when the same was discovered.  Moreover, [ONLINE’s] claim that [FAT KEE] did not reply on the Statement of Account aforestated is not entirely correct as the payments made by [FAT KEE] which [ONLINE] accepted were actually based on the Statement of Account using the rate of exchange of P34 for every US Dollar.

            In the matter of the award for Attorney’s fees, the same is justified and reasonable under the circumstances.  The complaint being unfounded and baseless, [FAT KEE] was forced to litigate and to engage the services of counsel for the protection of its interest.  The Court therefore finds justifiable and equitable reason for attorney’s fees to be awarded.

            WHEREFORE, premises considered, for lack of substantial merit and for reasons stated above, the Motion for Reconsideration is hereby DENIED.^[52]

          ONLINE thereafter filed a Notice of Appeal,^[53] elevating the case to the Court of Appeals.

          On September 26, 2005, the Court of Appeals rendered a Decision, reversing the judgment of the RTC in this wise:

We find the appeal meritorious.

            In the proceedings below, both parties harped on the propriety of using the exchange rate of P40:$1 as against the stated rate contained in the December SOA which the court a quo fixed at P34.00.  However, after scrutinizing the pieces of evidence submitted by the contending parties, We found the pronouncement of the court a quo wanting of bases and support.  Thus, in light of this conclusion, this Court is constrained to take exception from the findings of the trial court considering that there were pieces [of] evidence which had been misappreciated that will compel a contrary conclusion if properly taken into account.^[54]

          On the issue of estoppel on the part of ONLINE, the Court of Appeals adjudged that:

As borne by the records, ONLINE and FAT KEE had previous dealings with each other.  Out of all their transactions in the month of November 1997, six of these were transacted using the US Currency in their price quotations; two of these were actually paid in said notes.  While We agree that Invoice Nos. 4680 and 4838 were included in the December SOA, it should not however, be assumed that the same was the applicable conversion rate upon which FAT KEE relied on.

            x x x x

            Even granting that FAT KEE was of the impression that P34:$1 was the applicable rate for its obligation, this was however, immediately rectified by ONLINE when the parties met on January 1998, barely two months from FAT KEE’s receipt of the subject statement of account and before any payment for the same was advanced by FAT KEE, in order to negotiate the conversion rate of its obligation.  x x x  The fact that FAT KEE started paying its obligation under the dollar denominated invoices only on March 1998 fortifies the fact that both parties did not intend to be bound by the December SOA with respect to the subject invoices.

            Clearly, no estoppel as regards the December SOA may be ascribed to ONLINE because FAT KEE was not misled by ONLINE’s actuations, and even assuming arguendo that it was in fact misled, it still cannot invoke the principle as it was clearly negligent in not fully scrutinizing the receipts issued to it, which on their face made specific reference as to where payment was to be applied.  x x x  In pegging the amount at P34:$1, a peculiar situation will result where FAT KEE will be allowed to gain from defaulting payment despite absolute knowledge of its transactions with ONLINE. x x x. 

            x x x Other than its bare assertion, there were no indications to show that [FAT KEE] sought to correct the alleged irregular transactions. Neither is there any evidence on record demonstrating that sometime after making the purchase order, it made known its intention to take exception from the currency to be used.  By and large, FAT KEE cannot now be permitted to escape liability by simply alleging that the subject transactions were made solely upon the insistence of ONLINE.

            x x x x

            In this present recourse, it is undeniable that FAT KEE had given its assent to the foreign currency-based transaction with full knowledge of its probable effects and consequences that may spring therefrom.  This is evident from its acquiescence to the varying rates of exchange that ONLINE was charging the dollar transactions and its willingness to negotiate on the conversion rate.  x x x  And while this single proof of payment may not be regarded as a customary business practice, this however, may be taken as an indicium of FAT KEE’s concurrence to enter into a transaction that involves a foreign currency.^[55] (Emphases ours.)

As regards the applicable conversion rate, the appellate court held that:

Nevertheless, despite the above findings, this Court does not agree that the rate of conversion has been pegged by the parties at P40:$1.  It is evident that when the parties met on 15 January 1999, ONLINE’s proposal to FAT KEE to use the exchange rate of P41:$1 was declined by the latter and instead, FAT KEE made a counter offer of P35:$1.  Further renegotiations then ensued with ONLINE proposing a rate of P40:$1. On the other hand, FAT KEE, in a correspondence dated 2 March 1998, offered to use the exchange rate of P37:$1 for the satisfaction of its remaining obligation.  Thereafter, no further negotiations took place.  Significantly, on 17 March 1998, FAT KEE started to make payments for its remaining obligations, which ONLINE accepted without any protest.

            In fine, if ONLINE is to be held in estoppel, it is not from the issuance of the December SOA but rather from the last offer which pegged the exchange rate at the ratio of 37:1.  To Our mind, the silence of ONLINE and its receipt of the FAT KEE’s payment fifteen (15) days after the last correspondence may be taken as an implied acquiescence to the latter’s offer to pay in Philippine currency pegging the exchange rate at P37.00 to a US dollar.

            Thereby, from its actions subsequent to FAT KEE’s last offer, ONLINE is now barred from adopting an inconsistent position that would eventually cause loss or injury to another.  x x x

            On the other hand, ONLINE’s bare denial that this last offer was refused by the company simply contradicts the course of its action and at best, self serving.  Accordingly, utilizing the ratio of 37:1, FAT KEE’s obligation under Invoice Nos. 4680, 4838, 5090 and 5096 stands in the total amount of P5,148,528.91.  Admittedly, FAT KEE had already made payments for these invoices in the total amount of P4,758,574.18 from 17 March to 19 May 1998 and thus, only the amount of P389,954.73 remains unpaid.^[56]

          Thus, the Court of Appeals resolved the case as follows:

The only issue now left for resolution is where ONLINE’s claim should be computed at the fixed rate of exchange or the rate prevailing at the time of payment of the obligation.

Under Republic Act No. 8183, repealing Republic Act No. 529, parties to a contract may now agree that the obligation or transaction shall be settled in any currency other than the Philippine Currency at the time of payment.  The repeal of R.A. No. 529 by R.A. No. 8183 has the effect of removing the prohibition on the stipulation of currency other than Philippine currency, such that obligations or transactions may now be paid in the currency agreed upon by the parties.  Just like R.A. No. 529, however, the new law does not provide for the applicable rate of exchange for the conversion of foreign currency-incurred obligations in their peso equivalent.  It follows, therefore, that the jurisprudence established in R.A. No. 529 regarding the rate of conversion remains applicable.

Thus, in Asia World Recruitment, Inc. v. National Labor Relations Commission, the High Court, applying R.A. No. 8183, sustained the ruling of the NLRC that obligations in foreign currency may be discharged in Philippine currency based on the prevailing rate at the time of payment.  The wisdom on which the jurisprudence interpreting R.A. No. 529 is based, equally holds true with R.A. No. 8183.  Verily, it is just and fair to preserve the real value of the foreign exchange-incurred obligation to the date of its payment.

In this present recourse, We observed that ONLINE failed to sufficiently establish that the obligation was payable in US currency.  On the other hand, its actuations of negotiating for the mode of payment and allowing FAT KEE to settle its obligation in pesos are indicia of the want of any unequivocal agreement between the parties.  With no definite agreement that the transaction shall be settled in US Currency at the time of payment and considering the agreement of the parties to peg the rate at P37:$1, it now becomes an ineluctable conclusion that FAT KEE’s unpaid obligation shall be based at the rate of P37:$1 for the reasons discussed above.  Further validating this is ONLINE’s insistence that FAT KEE was liable to pay the amount of P756,095.05 and its allegations that the remaining unsettled controversy was confined to the amount of the applicable exchange rate.  Thus, it now becomes indubitable that the obligation was payable in a fixed rate.

Prescinding from the foregoing, We find that the exchange rate to be applied on FAT KEE’s obligation is the ratio of 37:1, and after deducting the amounts already paid, FAT KEE still owes ONLINE the amount of P389,954.73 excluding interest at the rate of 28% per annum, as stated on the face of the pertinent invoices, commencing from July 1998.  In the same manner and for having been compelled to institute this suit to vindicate its rights, attorney’s fees are also awarded to the [ONLINE] but the same is reduced to 10% of the total award.

WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the decision of the court a quo REVERSED and SET ASIDE.  Accordingly, the [FAT KEE] is ordered to pay the amount of P389,954.73 to [ONLINE] with interest at the rate [of] 28% per annum from July 1998 until paid, plus 10% of the total award representing attorney’s fees.^[57]

          FAT KEE filed a Motion for Reconsideration^[58] of the above decision, but the Court of Appeals denied the same in a Resolution dated January 26, 2006.

          Hence, this petition.

          FAT KEE invokes for resolution the following legal issues, to wit:

I

THE PETITION IS COMPLETE IN FORM AND SUBSTANCE

II

F.A.T. KEE DID NOT AGREE TO ENTER INTO A FOREIGN CURRENCY TRANSACTION

III

THERE WAS NO AGREEMENT TO USE A 1:37 PESO TO DOLLAR EXCHANGE RATE

IV

ONLINE WAS ESTOPPED BY THE 9 DECEMBER 1997 STATEMENT OF ACCOUNT.

          The Court shall determine the procedural questions first.

FAT KEE contests the argument of ONLINE that the instant petition is fatally defective for the failure of the former to attach the transcript of stenographic notes (TSN) of the RTC proceedings.  FAT KEE counters that there is no need to annex the said TSN given that ONLINE does not dispute the accuracy of the quoted portions of the transcripts and the petition does not request for a reevaluation of the evidence of the parties.  Assuming arguendo that the TSN should have been attached to the petition, FAT KEE begs for the relaxation of the rules so as not to frustrate the ends of substantive justice.  FAT KEE also rejects the contention of ONLINE that the petition raises only factual issues, which are not proper in a petition for review on certiorari.  FAT KEE argues that the Court of Appeals likewise erred in re-evaluating the evidence and substituted its own interpretation of the testimonies of the witnesses.

          On this preliminary procedural issue, we rule that the non-attachment of the relevant portions of the TSN does not render the petition of FAT KEE fatally defective. 

Rule 45, Section 4 of the Rules of Court indeed requires the attachment to the petition for review on certiorari “such material portions of the record as would support the petition.”^[59]  However, such a requirement was not meant to be an ironclad rule such that the failure to follow the same would merit the outright dismissal of the petition.  In accordance with Section 7 of Rule 45, “the Supreme Court may require or allow the filing of such pleadings, briefs, memoranda or documents as it may deem necessary within such periods and under such conditions as it may consider appropriate.”^[60]  More importantly, Section 8 of Rule 45 declares that “[i]f the petition is given due course, the Supreme Court may require the elevation of the complete record of the case or specified parts thereof within fifteen (15) days from notice.”^[61]  Given that the TSN of the proceedings before the RTC forms part of the records of the instant case, the failure of FAT KEE to attach the relevant portions of the TSN was already cured by the subsequent elevation of the case records to this Court.  This pronouncement is likewise in keeping with the doctrine that procedural rules should be liberally construed in order to promote their objective and assist the parties in obtaining just, speedy and inexpensive determination of every action or proceeding.^[62]

          As to the substantive issues raised in the instant petition, the Court finds that, indeed, questions of fact are being invoked by FAT KEE.  A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.  For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them.^[63]

Rule 45, Section 1 of the Rules of Court dictates that a petition for review on certiorari “shall raise only questions of law, which must be distinctly set forth.”^[64]  This rule is, however, subject to exceptions,^[65] one of which is when the findings of fact of the Court of Appeals and the RTC are conflicting.  Said exception applies to the instant case.

Substantially, FAT KEE primarily argues there was neither any agreement to enter into a foreign currency-based transaction, nor to use a dollar exchange rate of P37:US$1.  The invoice receipts denominated in US dollars were unilaterally prepared by ONLINE.  Similarly, the Accounting Department of ONLINE required that the Purchase Order to be submitted by FAT KEE be denominated in US dollars and Frederick Huang, Jr. merely complied with the same upon the instructions of Payoyo.  Contrary to ONLINE’s claim, it issued the SOA dated December 9, 1997 with the alleged unpaid obligation of FAT KEE quoted in Philippine pesos.  FAT KEE also takes issue with the ruling of the Court of Appeals that it assented to the payment in US dollars of the transactions covered under Invoice Nos. 4680, 4838, 5090 and 5096.  Lastly, FAT KEE reiterates the ruling of the RTC that ONLINE was estopped from seeking payment in US dollars since the outstanding obligation of FAT KEE was denominated in Philippine pesos in the SOA dated December 9, 1997.  Claiming that the SOA was its only basis for payment, FAT KEE allegedly paid its obligations in accordance therewith and ONLINE duly accepted the payments.

After a meticulous review of the records, we resolve to deny the petition.

FAT KEE subscribes to the rulings of the RTC in the Decision dated November 7, 2000 and the Order dated July 25, 2001. The trial court found that there was no agreement as to the exchange rate for the conversion of the outstanding balance of FAT KEE to Philippine pesos.  A reading of the RTC rulings reveals that the trial court principally relied on the SOA dated December 9, 1997 and the testimony of Frederick Huang, Jr. in setting the exchange rate at P34:US$1.  The RTC ruled that ONLINE was estopped from claiming otherwise since FAT KEE actually paid its outstanding balance in accordance with the SOA.  Furthermore, the RTC determined that ONLINE failed to undertake any action to correct the SOA, which the latter claimed was unauthorized.  No disciplinary action was likewise taken against Edwin Morales, the employee who allegedly issued the SOA without authority.

In British American Tobacco v. Camacho,^[66] the Court emphasized the doctrine of estoppel as follows:

Estoppel, an equitable principle rooted in natural justice, prevents persons from going back on their own acts and representations, to the prejudice of others who have relied on them.  The principle is codified in Article 1431 of the Civil Code, which provides:

Through estoppel, an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.

Estoppel can also be found in Rule 131, Section 2 (a) of the Rules of Court, viz:

Sec. 2.  Conclusive presumptions. — The following are instances of conclusive presumptions:

(a)        Whenever a party has by his own declaration, act or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission be permitted to falsify it.

The elements of estoppel are: first, the actor who usually must have knowledge, notice or suspicion of the true facts, communicates something to another in a misleading way, either by words, conduct or silence; second, the other in fact relies, and relies reasonably or justifiably, upon that communication; third, the other would be harmed materially if the actor is later permitted to assert any claim inconsistent with his earlier conduct; and fourth, the actor knows, expects or foresees that the other would act upon the information given or that a reasonable person in the actor’s position would expect or foresee such action.^[67]

In the instant case, we find that FAT KEE cannot invoke estoppel against ONLINE for the latter’s issuance of the SOA on December 9, 1997.  The Court agrees with the Court of Appeals’ ruling that any misconception on the part of FAT KEE engendered by the issuance of the SOA should have already been rectified when the parties subsequently met on January 15, 1998. The testimonial evidence of both ONLINE and FAT KEE establish that, during the meeting, the parties tried but failed to reach an agreement as regards the payment of FAT KEE’s outstanding obligation and the exchange rate to be applied thereto.  Whether or not FAT KEE was duly informed of the fact that the SOA was unauthorized is no longer of much importance.  By their act of submitting their respective proposals and counter-proposals on the mode of payment and the exchange rate, FAT KEE and ONLINE demonstrated that it was not their intention to be further bound by the SOA, especially with respect to the exchange rate to be used.  Moreover, FAT KEE only started making payments vis-à-vis the subject invoice receipts on March 17, 1998, or two months after the aforementioned meeting. 

At this point, Mijares v. Court of Appeals^[68] is instructive in declaring that:

One who claims the benefit of an estoppel on the ground that he has been misled by the representations of another must not have been misled through his own want of reasonable care and circumspection.  A lack of diligence by a party claiming an estoppel is generally fatal.  If the party conducts himself with careless indifference to means of information reasonably at hand, or ignores highly suspicious circumstances, he may not invoke the doctrine of estoppel.  Good faith is generally regarded as requiring the exercise of reasonable diligence to learn the truth, and accordinglyestoppel is denied where the party claiming it was put on inquiry as to the truth and had available means for ascertaining it, at least where actual fraud has not been practised on the party claiming the estoppel.^[69]

Thus, after participating in the meeting on January 15, 1998, submitting its own proposals and further renegotiating for the lowering of the exchange rate, FAT KEE cannot anymore insist that it was completely under the impression that the applicable exchange rate was P34:US$1 as purportedly indicated in the December 9, 1997 SOA.

Anent the proper exchange rate to be applied in this case, we likewise uphold the ruling of the Court of Appeals that estoppel finds application in this case as regards the implied acquiescence of ONLINE to the use of the P37:US$1 exchange rate.  On March 2, 1998, after a series of proposals on the conversion rate to be applied, FAT KEE finally offered to settle its outstanding balance at the rate of P37:US$1.  To this offer, ONLINE did not respond.  Thereafter, on March 17, 1998, FAT KEE began remitting payments continuously, which ONLINE duly accepted.  Following the dictum stated in British American Tobacco, ONLINE communicated, through its silence and acceptance of payments, that it was agreeable to the P37:US$1 rate.  Indeed, ONLINE should not be allowed to adopt a contrary position to the detriment of FAT KEE.

Premises considered, we find therefore that the applicable exchange rate to determine the outstanding balance of FAT KEE isP37:US$1.  We note, however, that the Court of Appeals inadvertently erred in computing the remaining balance to be paid by FAT KEE.  According to Invoice Nos. 4680, 4838, 5090 and 5096, the total unpaid amount is US$136,149.43.  By applying P37:US$1 rate on the unpaid amount, the resulting balance is P5,037,528.91, not P5,148,528.91 as determined by the Court of Appeals.  As FAT KEE has already paid a total amount of P4,758,574.18,^[70] the total unpaid amount owed to ONLINE is P278,954.73.    

WHEREFORE, the Petition for Review on Certiorari is DENIED.  The Decision dated September 26, 2005 of the Court of Appeals in CA-G.R. CV No. 71910 is hereby AFFIRMED with MODIFICATION that F.A.T. Kee Computer Systems, Inc. is ordered to pay the amount of P278,954.73 to Online Networks International, Inc., with interest at the rate of 28% per annumfrom July 1998 until fully paid, plus 10% of the total award as attorney’s fees.  No costs.   

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

  Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

^[1]               Rollo, pp. 11-31.

^[2]               Id. at 32-42; penned by Associate Justice Josefina Guevara-Salonga with Associate Justices Delilah Vidallon-Magtolis and Fernanda Lampas-Peralta, concurring.

^[3]               Id. at 129-135; penned by Judge Oscar B. Pimentel.

^[4]               Records, pp. 1-7.

^[5]               Id. at 100-103.

^[6]               Id.

^[7]               Id. at 3.

^[8]               The total amount due as computed by ONLINE, plus 28% interest per annum for three months, was P3,012,636.17.  However, this is inaccurate.  The said amount is the result obtained upon the application of the 28% interest on the alleged unpaid balance of P2,943,944.14 for a period of one (1) month only.  A recomputation of the figures shows that the correct total amount should have been P3,150,020.23.      

^[9]               Records, pp. 37-45.

^[10]             Id. at 175.

^[11]             TSN, July 29, 1999, p. 6.

^[12]             Id. at 9.

^[13]             Id. at 14-15.

^[14]             Id. at 18.

^[15]             Id. at 20.

^[16]             Id. at 24.

^[17]             Id. at 24-25.

^[18]             Records, pp. 118-119.

^[19]             TSN, July 29, 1999, p. 27.

^[20]             The Purchase Order was dated November 26, 1997; records, p. 120.

^[21]             TSN, August 5, 1999, p. 7.

^[22]             Records, p. 121.

^[23]             TSN, August 5, 1999, pp. 12-13.

^[24]             Id. at 20-22.

^[25]             Id. at 26.

^[26]             TSN, September 7, 1999, p. 7.

^[27]             Id. at 9-10.

^[28]             Id. at 12-13.

^[29]             Id. at 14-15.

^[30]             Id. at 17.

^[31]             Id. at 21.

^[32]             The amount stated in Invoice No. 4680 was $66,954.70, while the amount in Invoice No. 4838 was $44,177.45.

^[33]             By dividing the amounts in Philippine pesos by the amounts in US dollars.

^[34]             TSN, November 11, 1999, pp. 18-20.

^[35]             The amount stated in Invoice No. 5090 was $11,297.28, while the amount in Invoice No. 5096 was $13,720.00.

^[36]             TSN, February 23, 2000, pp. 13-14.

^[37]             Id. at 16.

^[38]             Id. at 17.

^[39]             Id. at 20-21.

^[40]             Id. at 22.

^[41]             TSN, May 11, 2000, p. 20.

^[42]             Id. at 21-22.

^[43]             TSN, June 15, 2000, p. 5.

^[44]             Id. at 7-9.

^[45]             Id. at 9-10.

^[46]             Id. at 13-14.

^[47]             Id. at 15-16.

^[48]             Id. at 18-20.

^[49]             Id. at 29.

^[50]             Rollo, pp. 132-134.

^[51]             Records, pp. 265-287.

^[52]             Id. at 311-312.

^[53]             Id. at 313-316.

^[54]             Rollo, p. 36.

^[55]             Id. at 36-39.

^[56]             Id. at 39-40.

^[57]             Id. at 40-42.

^[58]             CA rollo, pp. 201-208.

^[59]             SEC. 4. Contents of petition. – The petition shall be filed in eighteen (18) copies, with the original copy intended for the court being indicated as such by the petitioner, and shall (a) state the full name of the appealing party as the petitioner and the adverse party as respondent, without impleading the lower courts or judges thereof either as petitioners or respondents; (b) indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received; (c) set forth concisely a statement of the matters involved, and the reasons or arguments relied on for the allowance of the petition; (d) be accompanied by a clearly legible duplicate original, or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain copies thereof, and such material portions of the record as would support the petition; and (e) contain a sworn certification against forum shopping as provided in the last paragraph of section 2, Rule 42. (Emphasis ours.)

^[60]             SEC. 7. Pleadings and documents that may be required; sanctions. – For purposes of determining whether the petition should be dismissed or denied pursuant to section 5 of this Rule, or where the petition is given due course under section 8 hereof, the Supreme Court may require or allow the filing of such pleadings, briefs, memoranda or documents as it may deem necessary within such periods and under such conditions as it may consider appropriate, and impose the corresponding sanctions in case of non-filing or unauthorized filing of such pleadings and documents or non-compliance with the conditions therefor.

^[61]             See Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied Industries (GLOWHRAIN), 454 Phil. 463 (2003).

^[62]             Rules of Court, Rule 1, Section 6.

^[63]             Tirazona v. Court of Appeals, G.R. No. 169712, March 14, 2008, 548 SCRA 560, 581.

^[64]             SEC. 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency. (As amended by A.M. No. 07-7-12-SC.)

^[65]             The exceptions are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. (Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, April 28, 2004, 428 SCRA 79, 85-86.)

^[66]             G.R. No. 163583, August 20, 2008, 562 SCRA 511.

^[67]             Id. at 536-537.

^[68]             338 Phil. 274 (1997).

^[69]             Id. at 286-287.

^[70]             Records, pp. 104-111.