GR 125267; (February, 2008) (Digest)
G.R. No. 125267 ; February 18, 2008
EL ORO ENGRAVER CORPORATION, petitioner, vs. COURT OF APPEALS and EVERETT CONSTRUCTION SUPPLY, INC., respondents.
FACTS
Respondent Everett Construction Supply, Inc. delivered construction materials to petitioner El Oro Engraver Corporation from August 1980 to March 1981, with the transactions covered by Sales Invoices amounting to P681,316.70. Respondent’s practice was to prepare invoices in quadruplicate; the delivery personnel would have the customer’s representative sign the original and duplicate copies upon delivery, leave the duplicate with the customer, and retain the original. For collection, respondent would send Statements of Account appended with the original invoices for due transactions. On February 20, 1981, respondent sent such statements to petitioner, which neither objected nor made payment. After a formal demand in 1985 was ignored, respondent filed a collection case.
The Regional Trial Court ruled partially for respondent but awarded only P37,055.20, holding that respondent failed to prove a valid debt for the unsigned invoices. The trial court applied the presumption that possession of the original invoices by the creditor implies payment. The Court of Appeals reversed, finding petitioner liable for the full amount. It modified the decision, noting petitioner’s failure to deny the statements of account for over four years and to respond to the demand letter, which constituted an admission of liability.
ISSUE
Whether the Court of Appeals committed reversible error in modifying the trial court’s decision and holding petitioner liable for the full amount.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The Court clarified that factual findings of the Court of Appeals are generally binding, except when contradictory with the trial court’s findings, as here. After review, the Supreme Court found the appellate court’s factual conclusions more convincing. It emphasized respondent’s established business practice: the signed duplicate invoices remained with petitioner, while originals for due transactions were retained by respondent for collection purposes. Thus, respondent’s inability to produce signed originals for all invoices was explained by this practice, not by non-delivery or payment.
The Court further ruled that the Sales Invoices themselves contained the notation “PAYMENT NOT VALID WITHOUT OUR OFFICIAL RECEIPT,” indicating they were mere evidence of delivery, not proof of payment. Petitioner’s silence for over four years without contesting the Statements of Account, coupled with its failure in its Answer and during trial to specify which items were paid, defective, or not received, constituted an admission of the obligation. Petitioner’s general denials and unsubstantiated defenses were insufficient to overcome respondent’s prima facie evidence of sale and delivery.