Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-22358 January 29, 1975

PIO BARRETTO SONS,
INC
., petitioner,
vs.
COMPAIA MARITIMA, respondent.

Vicente del Rosario, E. V. Navarro and E. I.

Perez
for petitioner.

Rafael Dinglasan for respondent.

ESGUERRA, J.:
Petition for review on certiorari of the decision of the Court of Appeals in its CA-G.R. No. 23367-R
which reverses the judgment of the Court of First Instance of Manila, including its resolution denying
the petitioner's motion for reconsideration of the decision.
The factual background of the case is as follows:
Petitioner as plaintiff filed a complaint for collection of a sum of money against herein respondent,
alleging that during the months of October and November, 1941, the defendant (now respondent)
purchased on credit and received from the plaintiff (now petitioner), lumber worth P5,300.55; and on
December 4, 1941, the defendant-respondent again purchased on credit and received from the
plaintiff-petitioner, lumber worth P453.81, thereby incurring a total indebtedness of P6,054.36 with
stipulated interest of 12% per annum, plus attorney's fees.
Respondent as defendant filed its answer denying all the material allegations of the complaint and,
by way of counterclaim, prayed that plaintiff-petitioner be ordered to pay the sums of P500.00 as
expenses of litigation and P1,500.90 as Attorney's fees, plus costs.

Plaintiff-petitioner having filed its answer to the counterclaim of defendant-respondent, the case was
heard and the trial court rendered judgment in favor of the plaintiff-petitioner, the dispositive portion
of which reads as follows:
WHEREFORE, judgment is hereby rendered ordering defendant to pay to plaintiff the
sum of P6,054.36, with legal interest thereon from the filing of the complaint until fully
paid, plus attorney's fees in the amount of P500.00, together with the costs.
Both parties appealed to the Court of Appeals, the plaintiff PIO BARRETTO SONS, INC. assigning
the following error:
The Lower Court erred in holding that the moratorium orders and laws condoned the
stipulated interest of 12% per annum on defendant's prewar indebtedness, and in
awarding to plaintiff only the legal interest from the filing of the complaint. (pp. 4-5,
Brief for the Plaintiff-Appellant)
and defendant COMPAIA MARITIMA making four assignment of errors, to wit:
I. The Lower Court erred in holding that plaintiff had proven its alleged claims of
P5,600.55 and P453.81.
II. The Lower Court erred in holding that defendant had not paid plaintiff's alleged
claim in the amount of P5,600.55.
III. The Lower Court erred in not holding that the complaint states no cause of action
against defendant, and that the alleged cause of action, if any at all, is already barred
by the statute of limitation of actions.
IV. The Lower Court erred in ordering defendant to pay to plaintiff the sum of
P6,054.36 plus legal interest thereon from the filing of the complaint until fully paid,
plus attorney's fees in the amount of P500.00 together with the costs. (pp. 1-2, Brief
for the Defendant-Appellant)
The Court of Appeals reversed the judgment of the trial court and ordered the dismissal of the case
on the ground that delivery of the lumber by plaintiff-petitioner to defendant-respondent was not duly
proved.
Petitioner's motion for reconsideration of the decision of the Court of Appeals was denied again on
the ground of lack of sufficient showing of a valid delivery of the lumber in question by the Barretto
Sons, Inc. to the Compaia Maritima.
Hence this petition for review on certiorari.
Petitioner maintains that:

I. The Court of Appeals erred in creating and raising, motu propio, for the first time a
new issue, that of the question of delivery, upon which the Court of Appeals based its
decision reversing the judgment of the trial Court.
II. The Court of Appeals erred in its conclusion drawn from proven facts, and has
decided the case in a way not in accordance with law or with the applicable decisions
of this Court, and
III. The Court of Appeals erred in that it has so far departed from the accepted and
usual course of judicial proceedings. (pp. 1-2, Brief for Petitioner).
Petitioner further asserts that the case having been tried and decided by the trial court on the issue
of whether or notthere was payment made by respondent Compaia Maritima of the lumber covered
by Exhs. "A-1" to "A-6" (invoices of petitioner) and Exh. "B", "B-1 " to "B-4 (the counter-receipts
issued by the respondent), it is alone on this issue that the Court of Appeals should have decided the
case and not on the issue of whether or not there was delivery of the lumber in question.
The principal issue, therefore, before Us is whether or not the Court of Appeals decided the case on
a new issue not raised in the pleadings before the lower courts.
We rule that the issue of delivery on which the Court of Appeals based its decision reversing that of
the trial court is no new issue at all. For delivery and payment in a contract of sale, or for that matter
in quasi-contracts, are so interrelated and intertwined with each other that without delivery of the
goods there is no corresponding obligation to pay. The two complement each other. Thus, "by the
contract of sale one of the contracting parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent."
(Art. 1458, 1st par., new Civil Code). The source of this provision of law is Article 1445 of the old
Code, which provides:
By the contract of purchase and sale one of the contracting parties obligates himself
to deliver a determinate thing and the other to pay a certain price therefor in money
or in something representing the same.
It is clear that the two elements cannot be dissociated, for "the contract of purchase and sale is,
essentially, a bilateral contract, as it gives rise to reciprocal obligations; to wit, on the part of the
seller, "to deliver a determinate thing, and on the part of the buyer, "to pay a certain price therefor in
money or in something representing it." " (p. 1, Capistrano, The Law of Purchase and Sale).
The finding of the Court of Appeals that there was no delivery of the lumber is well founded. As
succinctly ruled by said Court:
That this is basically an action for lumber allegedly bought, received, and not paid
for; now just as a seller, in order to recover, must prove not only that he has sold and
delivered and has not been paid, so a buyer in order to be condemned to pay must
be shown to have bought, received, and not paid. Of course, it is correct to say as
plaintiff says that even if there had been no purchase, provided there had been a

delivery, it could recover, not on the sale but on the quasi-contract against unjust
enrichment, but whether on sale or on quasi contract, the vital element is delivery; ...
nor should it be said that there was no issue at all between the parties as to the fact
of delivery; because that issue was present in the pleadings, not only as can be seen
in par. 2 of the answer, but also as can be seen from the fact that plaintiff itself on p.
20 of the tsn. Vol. I, asked its own witness, Roman Legarda So, this question:
"Q. Was that lumber covered by that invoice duly received and
acknowledged by the Compaia Maritima?"
and defendant on the other hand spent a good part of its proofs in demonstrating that
there had been no delivery, e.g., Vol. II, pp. 132-134; now on the vital point of
delivery, it must be remembered that the procedure between the parties as sought to
be proved by plaintiff itself thru its witness, Juanito G. Perez, had been as follows:
"A. Whenever the Compaia Maritima orders lumber from our
company, the Compaia Maritima issues a purchase order to the Pio
Barretto Sons, Inc. When this purchase order is received by the Pio
Barretto Sons, Inc., the Pio Barretto Sons, Inc. delivers the lumber, as
specified in the purchase order. Upon delivery of this lumber, the
lumber is covered by invoice of the Pio Barretto, together with the
purchase order of the Compaia Maritima. Now, when the lumber is
received by the Compaia Maritima, the Compaia Maritima stamps
our invoice for the lumber delivered, and the receiving clerk signs the
said invoice for the Compaia Maritima. Now, after the lumber has
been delivered, our delivery man brings back to our office and gives
the invoice to me, together with the purchase order. Now, at the end
of each week, I prepare the Statement of Accounts to be sent the
Compaia Maritima, through our collector, and, in turn, the
Accounting Department of the Compaia Maritima issues as the
kinds of receipts for the invoices, purchase orders, and statements of
accounts surrendered to them." tsn. 76-77, Vol. I;
stated
otherwise
, first, there was a purchase order by Maritima; 2ndly, there was an invoice by Barretto; 3rdly, there was a delivery unto
Maritima; 4thly, there was a delivery of the purchase order and delivery receipt unto Maritima for checking or revision;
and since Maritima would because of that retain the purchase orders and delivery receipts, it would issue in exchange
its own counter receipt of said documents; and 5thly, after due verification had been made, Maritima would then pay;
this procedure should now be correlated to the evidence herein presented; now plaintiff has here presented two sets of
documents, A to A-6 and B to B-4; the first set consists of a purchase order, together with the invoices or delivery
receipts, At to A-6; and the second set consists of counter-receipts evidencing the fact that Maritima had received, with
the exception of that in B-4, certain documents, i.e., purchase orders and delivery receipts from Barretto, "para su
revision"; if then the documents would be correlated with the testimonies and the procedure outlined by witness Perez,
it will result that as to A to A-6, plaintiff, according to it, had already complied with the purchase order, the sale, and
delivery, but that it had not submitted all these to Maritima "para su revision" while as to B to B-4, it had according to it,
complied with purchase order (except as to B-4), sale, delivery, and submission "para su revision", but the same had
not been as yet checked and verified by Maritima; the question is, has this proof demonstrated plaintiff's cause of
action, pursuant to the very procedure by it outlined in its evidence to have been followed between the parties in the

course of their commercial transactions but how could that be when precisely because of that practice, it gave unto
Maritima the right to first verify; and there is no showing that had been verified; but let it not be here said that just
because Maritima had not yet verified, plaintiff should not be permitted to recover, for that practice must give way to the
truth, as plaintiff contends, that if it had after all proved delivery, defendant must pay; but has plaintiff proved
delivery under the evidence? According to what has been paid, plaintiff had, according to it, submitted its documents in
B to B-4 for revision; this means to say that it had in its possession and given unto Maritima purchase orders, and
delivery receipts, but does this mean that it had proved delivery? Can delivery be proved by the fact that one had in his
possession what one had believed to be a delivery receipt and submitted that for verification, without any actual proof
of delivery of the article? If that were the case, a litigant would be excused from proving the element most vital to show
his cause of action; and a Court of Justice must have to rely on the presumption that just because one had in his
possession a "delivery receipt", one had already delivered; but the vice of this argument is that it altogether parts from
the basis that the "delivery receipt" thus possessed and surrendered was a genuine delivery receipt, evidencing the
fact that buyer had indeed received; but here, there absolutely is no proof of that; what this Court has only seen in the
evidence nearest to the required proof is the stamp of Maritima on A-1 to A-6; for as this Court has said, the supposed
admission by defendant witness Narvaez that the lumber therein annotated had been "delivered" was clearly and
unfortunately, one that could not, to be fair to the witness, have been correctly meant to have by him been made,
for he was "purchasing agent" only and could not be qualified at all to declare if what he had authorized to be
purchased had been thereafter delivered, and the witness had in fact insisted against such alleged delivery to
"Posadas", and witness had all the time insisted that only one "J. Leoncio", could receive, and this clarification is
indisputably fortified by the very evidence of plaintiff, consisting in the purchase order Exh. A, wherein is annotated:

"Not valid unless invoices are receipted

and signed by: J. LEONCIO";
which name, "J. Leoncio" had been written precisely by said witness and this must
mean that the signature of "Posadas" in A-1 to A-6 by the evidence of plaintiff itself,
has been shown to have been unauthorized; and going to the stamp of Maritima on
A-1 to A-6, this had to be correlated to the fact that Narvaez has testified that:
This is our own stamp, but we did not authorize Mr. Posadas to sign
for any lumber received. tsn. 134, Vol. II;
nor has in fact, in any part of the evidence been shown any proof as even to show
the authenticity of said signature "Posadas"; or that said "Posadas" had actually
received said lumber; to prove at least that the lumber had been deposited in the
compound of Maritima by that "Posadas", for if there had been such proof in the
record, if plaintiff had shown evidence of that actual delivery of the lumber into the
possession of Maritima, then it would have been the obligation of this Court under
the law of quasi-contracts, to grant Barretto its prayer for the value of that; but no,
what Barrette has here presented as witnesses were first Roman Legarda So,
manager of Barretto, who admitted in cross that:
Q. With respect to Exhibits A-1 to A-5, you did not have any
personal intervention or participation in the preparation of these
documents?
A. No, sir, I did not have any participation or intervention.
Q. You did not have any personal intervention in the alleged
deliveries of these number to the Compaia Maritima? A. - No, sir, I
did not have.

A. As a matter of fact, you do not know who put these RUBBER

STAMPS here and signed at the bottom of these Exhibits A, A-1 to
A- 5?
Q. No, sir, I do not know. tsn. 57-58, Vol. I;
and then Juanita G. Perez, assistant cashier of Barretto who admitted in cross that:
Q. So, you do not know of your own personal knowledge the
circumstances or the manner in which these Exhibits A-1 to A-5 were
stamped. You do not know of your own personal knowledge?
A. Well, when it comes to stamping, I do not have any knowledge,"
tsn. 35, Vol. I;
under such a status of plaintiffs own proofs, how could it be said that plaintiff had
proved its case? And how would it be correctly insisted against this Court that it had
disregarded Lower Court's findings contrary to the existing jurisprudence when there
was no issue of credibility presented to this Court on which it indeed would have
been bound to rely as a rule upon Lower Court's determination; but what had been
before this Court was a simple issue of preponderance and it had to make its
conclusions based on the documents themselves presented by plaintiff it is because
of these that this Court is impelled to reiterate that it should rule as it had ruled
previously, for litigations can not be determined by possibly correct suppositions,
deductions or even presumptions, with no basis in the evidence, for the truth must
have to be determined by the hard rules of proof. (pp. 1-7, CA Resolution dated
January 8, 1964).
"An examination of said receipts would reveal that they were counter-receipts issued by Cia.
Maritima unto Pio Barretto certifying to the fact of having received from Pio Barretto, certain
statements, "para su revision", which can only mean not an admission of having received the lumber
but only an admission of having received certain statements on claims for lumber allegedly
delivered; ... that plaintiff has the duty to prove its affirmative allegations here of delivery to and
failure of defendant to pay, ... otherwise, the meaning would be that the sending of a statement of
account would be an evidence of the admission thereof which it surely is not. (p. 6, CA Decision
dated November 18, 1963; p. 27, ROA).
We concur in the foregoing observations and find that the conclusion of the Court of Appeals that
plaintiff did not satisfactorily prove delivery of the lumber in question is in accordance with the facts
and the law.
WHEREFORE, the judgment appealed from is hereby affirmed without pronouncement as to costs.
SO ORDERED.
Castro (Chairman), Teehankee, Makasiar and Muoz Palma, JJ., concur.