G.R. No. 130998 ; August 10, 2001
MARUBENI CORPORATION, RYOICHI TANAKA, RYOHEI KIMURA and SHOICHI ONE, petitioners, vs. FELIX LIRAG, respondent.

FACTS

Petitioner Marubeni Corporation is a foreign corporation organized under Japanese laws, doing business in the Philippines through its subsidiary. Petitioners Ryoichi Tanaka, Ryohei Kimura, and Shoichi One were officers of Marubeni assigned to its Philippine branch. Respondent Felix Lirag filed a complaint for specific performance and damages, claiming petitioners owed him P6,000,000.00 as commission under an oral consultancy agreement. Lirag alleged that on February 2, 1987, petitioner Ryohei Kimura hired his consultancy group to secure government contracts for various projects, promising a 6% consultancy fee based on total project costs. The agreement was not reduced to writing due to mutual trust and a long-standing business relationship dating back to 1960. Lirag performed by making representations with government officials, arranging meetings, and submitting documents. One project, the Bureau of Post project worth P100,000,000.00, was awarded to the “Marubeni-Sanritsu tandem.” Despite demands, petitioners did not pay the commission. Petitioners denied the agreement, asserting Kimura lacked authority to bind Marubeni, and that only the general manager with a special power of attorney could do so. They also claimed Marubeni did not participate in or benefit from the Bureau of Post project. The trial court ruled in favor of Lirag, ordering petitioners to pay jointly and severally. The Court of Appeals affirmed the decision, applying the doctrine of admission by silence, noting petitioner Tanaka’s response to a demand letter did not deny the claim but sought time to review the issue.

ISSUE

1. Whether there was a consultancy agreement between petitioners and respondent.
2. Corollary: Whether respondent is entitled to receive a commission if such an agreement existed.

RULING

The Supreme Court found the appeal meritorious. While factual findings of the Court of Appeals are generally conclusive, exceptions apply, such as when the conclusion is grounded on speculation, surmises, or conjectures. The Court held that the evidence did not solidly establish the existence of an oral consultancy agreement. Respondent’s evidence, including testimonies and documents, was insufficient to meet the required preponderance of evidence. The Court noted inconsistencies and lack of corroboration for key claims, such as the specific terms of the agreement and the authority of Kimura to bind the corporation. Petitioner Tanaka’s response to the demand letter, which sought time to review the issue, did not constitute an admission of the agreement. The burden of proof lay with respondent, and the evidence being in equipoise, he failed to establish his case. Therefore, the decision of the Court of Appeals was reversed, and the complaint was dismissed.