G.R. No. 146428 ; January 19, 2009
HEIRS OF THE DECEASED CARMEN CRUZ-ZAMORA, Petitioners, vs. MULTIWOOD INTERNATIONAL, INC., Respondent.

FACTS

On November 18, 1993, Carmen Cruz-Zamora filed a Complaint against Multiwood International, Inc. alleging that she signed a Marketing Agreement in 1987 to act as its agent. She claimed she obtained contracts for Multiwood with Edsa Shangrila, Makati Shangrila, and Diamond Hotel, and was entitled to a 10% commission under the agreement. Multiwood defaulted on paying her commission amounting to ₱254,089.52. Multiwood, in its Answer, asserted that Zamora was not entitled to commissions for these projects because they were “construction contracts,” while the Marketing Agreement covered only the sale of Multiwood products. Multiwood also counterclaimed for unliquidated advances of ₱37,397.71. During pre-trial, the parties stipulated the issues: (1) whether the projects were construction contracts or contracts for the sale of products; (2) whether Multiwood was liable for ₱254,089.52 and damages; and (3) whether Zamora was liable on the counterclaim. The Regional Trial Court (RTC) ruled in favor of Zamora, interpreting the Marketing Agreement to include construction contracts and ordering Multiwood to pay ₱165,941.78 with interest, moral damages, attorney’s fees, and dismissing the counterclaim. The Court of Appeals (CA) reversed the RTC, holding that the Marketing Agreement was limited to soliciting buyers for Multiwood’s products and did not cover construction contracts. The CA dismissed the complaint and held Zamora liable for the unliquidated advances. Zamora’s motion for reconsideration was denied. Zamora (substituted by her heirs after her death) elevated the case to the Supreme Court via petition for review.

ISSUE

Whether the Court of Appeals erred in ruling that the Marketing Agreement did not entitle Zamora to a 10% commission for soliciting construction contracts (specifically with Edsa Shangrila, Makati Shangrila, and Diamond Hotel).

RULING

The Supreme Court denied the petition and affirmed the CA Decision and Resolution. The Court held that the terms of the Marketing Agreement were clear and explicit: it granted Zamora the non-exclusive right to “identify, solicit, find or introduce for negotiation, prospective local and foreign buyers, dealers, or customers for the products of the principal,” with compensation of 10% of the invoice price for products sold. The agreement did not mention construction contracts. When contract terms are clear, they must be understood literally, and courts cannot rewrite the contract. The Court found that Zamora failed to prove by preponderance of evidence that the Marketing Agreement covered construction contracts or that a separate agreement existed for such commissions. Exhibits K to K-7 (vouchers for partial payments) were not formally offered in evidence and could not be considered. Even if considered, they did not conclusively prove an agreement for commissions on construction contracts. The Court also noted that Exhibits B to H showed discrepancies, with Exhibit H mentioning a 5% commission, not 10%. Thus, Zamora did not establish her claim. The CA correctly ruled that Multiwood was not liable for commissions on the construction projects, and Zamora was liable for the unliquidated advances of ₱37,397.71 with legal interest.