G.R. No. 174806; August 11, 2010
SOLOIL, INC., Petitioner, vs. PHILIPPINE COCONUT AUTHORITY, Respondent.

FACTS

Petitioner Soloil, Inc., a domestic corporation engaged in exporting coconut products, was sued by respondent Philippine Coconut Authority (PCA) for the collection of unpaid PCA fees amounting to ₱403,543.29 as of December 31, 1994. PCA’s complaint alleged that the fees pertained to Soloil’s domestic sales of coconut products. In its defense, Soloil asserted that the complaint failed to state a cause of action because it never engaged in domestic sales; its business was purely export-oriented. The Regional Trial Court (RTC) largely agreed with Soloil, finding PCA failed to prove the fees were from domestic sales and ordering Soloil to pay only ₱509.66 plus interest.
PCA appealed, arguing that the fees attached to Soloil’s purchase of copra, irrespective of whether the subsequent sale was domestic or export. The Court of Appeals vacated the RTC decision, ruling that PCA fees are levied on the purchase of copra by exporters like Soloil, with no distinction based on the final disposition of the product. It ordered Soloil to pay the full claimed amount.

ISSUE

The issues are: (1) whether PCA’s complaint stated a cause of action despite alleging non-payment on domestic sales while the evidence pertained to export transactions; and (2) whether Soloil is liable for the claimed PCA fees.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the Court held that a cause of action exists if the pleading shows a right of the plaintiff, a correlative obligation of the defendant, and an act or omission violating that right. PCA’s complaint, by alleging Soloil’s refusal to pay legally mandated fees, sufficiently stated a cause of action. The variance between the allegation (domestic sales) and the evidence (export-related purchases) is not fatal. A cause of action is determined from the facts alleged in the complaint, not the evidence or the defendant’s characterization of its business.
On the second issue, the Court ruled that Soloil is liable. The legal basis for the fees is Presidential Decree No. 1468, as amended, which authorizes PCA to impose fees on every kilogram of copra purchased. The obligation to pay attaches at the moment of purchase by a copra exporter. The law does not differentiate based on whether the purchased copra is for domestic or export sale. Soloil’s admission that it purchased copra in its export business thus established its liability. The Summary of Outstanding PCA Fee Obligations, a public document enjoying a presumption of regularity, substantiated the amount. Therefore, Soloil is liable for the full ₱403,543.29 with 14% annual interest from January 1995 until fully paid.