G.R. No. L-62130 September 28, 1984
SEAVAN CARRIER, INC., and RENATO GACHO Y ABAD, petitioners, vs. GTI SPORTSWEAR CORPORATION and the HON. ABELARDO M. DAYRIT, in his capacity as Judge of the Court of First Instance of Manila, Branch XXXIX, respondents.

FACTS

This case originated from an action for sum of money and damages filed by GTI Sportswear Corporation against Seavan Carrier, Inc. and Renato Gacho y Abad. The trial court rendered a summary judgment on April 10, 1979. The defendants failed to appeal and instead filed a petition for relief from judgment, which the court granted. After a trial on the merits, a decision was rendered against the petitioners on September 14, 1981. The decision was received at the law office of petitioners’ counsel, Atty. Alfonso Usison, by his daughter Susan on September 22, 1981. However, Atty. Usison allegedly only learned of the decision on February 12, 1982, after a writ of execution was being enforced, because his daughter forgot to inform him. The trial court denied the petitioners’ subsequent Urgent Omnibus Motion, which sought relief from judgment and to quash the writ of execution.
The trial court’s decision ordered the petitioners to pay, among others, the value of lost goods, customs duties, and P2,400,000.00 representing losses in the goodwill of the plaintiff corporation. The petitioners challenged the denial of their motions and the excessive damages awarded.

ISSUE

The primary issues are: (1) whether the failure of counsel to notify his client of an adverse judgment constitutes excusable negligence warranting relief from judgment; and (2) whether the award of P2,400,000.00 for loss of goodwill is supported by sufficient evidence.

RULING

The Supreme Court affirmed the trial court’s order denying the petition for relief but modified the award of damages. On the first issue, the Court upheld the principle that notice to counsel is notice to the client. The negligence of Atty. Usison’s daughter, who was habitually permitted to receive court processes for him, in failing to transmit the decision was not excusable. The client is bound by the mistakes of its counsel. Furthermore, the petition for relief filed in 1982 was already the second such petition, the first having been filed after a prior summary judgment became final.
On the second issue, the Court ruled that the award of P2,400,000.00 for loss of goodwill was not supported by the best evidence obtainable as required for actual damages under Article 2200 of the Civil Code. The only basis was the testimony of a manager regarding cancelled orders, with no documentary evidence presented to substantiate the volume of orders or the average profits from previous years. The evidence was speculative and inadequate to prove the alleged loss of anticipated profits, especially since the amount awarded far exceeded the value of the actual lost goods. Consequently, this portion of the damages was deleted. The decision was affirmed in all other respects.