G.R. No. 149429 ; October 9, 2006
Hadji Mahmud L. Jammang and Alma Shipping Lines, Inc., petitioners, vs. Takahashi Trading Co., Ltd., and Sinotrans Shandong Company, respondents.

FACTS

Petitioner Hadji Mahmud Jammang, owner of MV Queen Alma and manager of Alma Shipping Lines, was introduced by respondent Takahashi Trading to respondent Sinotrans Shandong. Jammang represented having ready buyers in Labuan, Malaysia, for Sinotrans’s goods. Sinotrans shipped goods valued at US$696,337, consigned to Takahashi. Jammang’s representations proved false, forcing costly storage. Jammang then convinced the parties to transship the goods to Zamboanga City, again assuring ready buyers and promising to remit sale proceeds and return unsold items to Sinotrans, with profits to be shared equally with Takahashi.
Only a partial payment of US$230,000 was remitted. Consequently, the parties executed a Supplemental Agreement on July 27, 1994, wherein Alma Shipping Lines, Inc., acknowledged the receipt of goods, confirmed the partial payment, and undertook to remit specific collectibles and account for remaining stocks. Jammang remitted only an additional US$15,000. Sinotrans discovered Jammang had sold all the goods but failed to account for the remaining balance of US$451,337. Despite demands, Jammang failed to pay, leading respondents to file a collection case.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s decision holding petitioners liable under the Supplemental Agreement for the unpaid balance of the goods’ value.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ rulings. The Court emphasized that factual findings of the Court of Appeals, especially when congruent with the trial court, are binding and not subject to review. The core legal issue was the validity and enforceability of the Supplemental Agreement. Jammang’s defense—that he was merely a facilitator, not a buyer or agent, and signed the agreement only for record purposes—was rejected.
The Court found his version contrived and inconsistent with human experience and the documentary evidence. The clear terms of the Supplemental Agreement established a direct contractual obligation for Alma Shipping Lines, Inc., to account for and remit the proceeds. As an experienced businessman, Jammang could not credibly claim he signed such a substantial financial undertaking without understanding its consequences. The agreement’s unambiguous language left no room for doubt regarding the parties’ intention to hold Jammang and his company liable for the unpaid balance. Therefore, petitioners were legally bound to fulfill their contractual undertaking as stipulated.