GR 147970; (March, 2006) (Digest)
G.R. No. 147970 . March 31, 2006
PCL Industries Manufacturing Corporation, Petitioner, vs. The Court of Appeals and ASA Color & Chemical Industries, Inc., Respondents.
FACTS
Private respondent ASA Color & Chemical Industries, Inc. filed a complaint for sum of money with preliminary attachment against petitioner PCL Industries Manufacturing Corporation before the Regional Trial Court (RTC). ASA alleged that from January to April 1994, PCL purchased printing ink materials worth P504,906.00, payable within 30 days from invoice dates, but failed to pay despite demands. The RTC issued a writ of preliminary attachment, which PCL moved to dissolve, but the motion was denied. PCL did not elevate this denial to a higher court. In its Answer, PCL admitted the purchases but claimed the ink materials delivered in 1994 were defective, causing its finished plastic products to emit a bad smell and leading to customer rejections. PCL asserted it had communicated these defects orally to ASA’s representative and through a September 1995 letter, requesting ASA to pick up the unused defective materials.
ISSUE
The primary issue is whether PCL validly refused to pay the purchase price based on its claim of delivering defective ink materials.
RULING
The Supreme Court affirmed the CA decision ordering PCL to pay the sum, but lifted the writ of preliminary attachment. On the main obligation, the Court upheld the concurrent factual findings of the RTC and CA that PCL failed to substantiate its defense. The evidence showed that PCL’s documented complaints and returned items pertained to 1993 deliveries, not the 1994 purchases subject of the complaint. Aside from a belated September 1995 letter, PCL presented no convincing proof of a timely and proper demand regarding defects in the 1994 deliveries. The testimony and memos regarding customer rejections were found insufficient to establish a causal link between the alleged product smell and ASA’s ink, especially since PCL used materials from multiple suppliers. Consequently, PCL’s claim of right to return the goods and withhold payment lacked factual basis. However, the Court found the writ of preliminary attachment improper, as the factual basis for alleging fraud in incurring the obligation was insufficiently established. The attachment was ordered lifted, but the monetary judgment stood.