G.R. Nos. 138701-02, October 17, 2006
Spouses Roque Yu, Sr. and Asuncion Yu and Leyte Lumber Yard & Hardware Co., Inc., petitioners, vs. Basilio G. Magno Construction and Development Enterprises, Inc. and The Estate of Basilio G. Magno, respondents.

FACTS

Petitioners Spouses Yu, controlling stockholders of petitioner Leyte Lumber, had a long-standing business relationship with the late Engr. Basilio G. Magno and his corporation, respondent Basilio G. Magno Construction and Development Enterprises, Inc. (BG Magno). The relationship involved the supply of construction materials on credit and personal loans. Upon Magno’s death, petitioners filed two separate collection suits before the Regional Trial Court (RTC) of Tacloban City. Civil Case No. 5822 was filed by Leyte Lumber against BG Magno and the Estate to collect for construction materials. Civil Case No. 5823 was filed by the Spouses Yu against the same defendants to collect on alleged loans and advances. The cases were raffled to different branches.
In Civil Case No. 5822, a commissioner was appointed to examine the parties’ accounts. Both RTC branches eventually dismissed the complaints. Instead, they found that the respondents had made overpayments to the petitioners. Branch 8 ordered Leyte Lumber to return P620,239.61 to BG Magno, while Branch 6 ordered the Spouses Yu to return P1,602,625.52. The Court of Appeals consolidated the appeals and largely affirmed the RTC decisions, with modifications on the amounts of the counterclaims.

ISSUE

The core issue is whether the Court of Appeals erred in affirming the trial courts’ decisions which dismissed the petitioners’ collection suits and instead granted the respondents’ counterclaims for overpayment.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals with modifications. The legal logic rests on the evaluation of evidence and the role of trial courts. The findings of fact by the trial courts, as affirmed by the Court of Appeals, are generally conclusive and binding. Petitioners failed to demonstrate any compelling reason, such as a gross misapprehension of facts, to warrant a deviation from this rule. The trial courts’ conclusions were based on their assessment of the evidence presented, including the commissioner’s reports in Civil Case No. 5822.
The Court found no merit in petitioners’ arguments attacking the credibility of the commissioner’s reports or the procedural handling of the cases. The appointment of the commissioner was with the parties’ consent, and his findings carried weight. Furthermore, the Supreme Court modified the award by deleting a specific portion of the counterclaim in Civil Case No. 5822 due to a computational error identified by the Court of Appeals, and deleted the award of attorney’s fees to the petitioners in Civil Case No. 5823 for lack of basis. The awards of damages and attorney’s fees to the respondents were sustained as justified under the circumstances.