G.R. No. 248063 . September 15, 2021
Nilda Eleria Zapanta and husband German V. Zapanta, petitioners, vs. Rustan Commercial Corporation, respondent.

FACTS

Rustan Commercial Corporation (RCC) operates department stores and sells gift certificates. Petitioner Nilda Zapanta was RCC’s Credit and Collection Manager. In 2001, an audit revealed discrepancies in the ledgers and aging reports from her department. The investigation discovered irregularities from gift certificate purchases under the account name “Rita Pascual.” The standard operating procedure required gift certificates purchased on credit to be documented with Charge Chit documents (CCGCs), with copies forwarded to the Accounting and Credit and Collection Departments for posting and billing. The audit found that for the Rita Pascual account, Nilda intercepted the CCGCs, personally handled all related documents, and instructed a subordinate not to post the transactions. Between 1999 and 2003, gift certificates worth P78,120,000.00 were ordered under this account, often by Nilda’s messenger. Investigation revealed Nilda sold these gift certificates at a discount to third parties, including spouses Alberto and Lucita Flores, and pocketed the proceeds. She also instructed Alberto Flores to say the certificates came from Rita Pascual if asked. When confronted, Nilda turned over some CCGCs and a Charge Account Application form for Rita Pascual, which she had annotated and approved. She later submitted a retirement letter instead of explaining. RCC filed a complaint for sum of money and damages. The RTC granted a writ of preliminary attachment on properties of Nilda and her husband German. After the RTC denied their Demurrer to Evidence, the petitioners repeatedly failed to present their evidence and were deemed to have waived their right. The RTC ruled in favor of RCC. The Court of Appeals affirmed the RTC decision. Petitioners elevated the case to the Supreme Court.

ISSUE

1. Whether the Court of Appeals erred in affirming the RTC’s decision which deemed petitioners to have waived their right to present evidence.
2. Whether the Court of Appeals erred in affirming the RTC’s finding of fraud and holding petitioners liable for the value of the gift certificates.
3. Whether the Court of Appeals erred in affirming the RTC’s decision making the writ of preliminary attachment permanent.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision with MODIFICATION regarding the award of damages and the scope of the attachment.
1. On the waiver of the right to present evidence: The Supreme Court held that petitioners were not denied due process. The RTC reset the hearings for initial defense evidence seven times, five times due to petitioners’ fault, over a period of more than a year. Petitioners were duly notified and represented by counsel. Their claim of inability to locate witnesses was not a compelling reason for further delay. The RTC’s order deeming them to have waived their right to present evidence was a reasonable consequence of their unjustified non-compliance and failure to prosecute their defense with diligence.
2. On the finding of fraud and liability: The Court found that RCC presented sufficient evidence to establish fraud and Nilda’s liability. Nilda violated standard operating procedures by personally handling the fictitious Rita Pascual account, intercepting CCGCs, preventing the posting of transactions, and instructing a subordinate to misreport the account status. Testimony from Alberto Flores confirmed Nilda sold the gift certificates at a discount and instructed him to lie about their source. Her actions constituted fraud, making her liable for the value of the gift certificates obtained (P78,120,000.00). However, the Court modified the award of actual damages. Following jurisprudence, the legal interest of 6% per annum on the principal amount should run from the date of judicial demand (filing of the complaint on February 7, 2003) until finality of judgment. Thereafter, interest at 6% per annum shall be imposed on the total amount (principal plus interest) until full satisfaction. The awards for litigation expenses and attorney’s fees were deleted for lack of factual and legal basis.
3. On the writ of preliminary attachment: The Court affirmed the CA’s ruling that the attachment on the conjugal properties (house and lot in Parañaque and land in Laguna) was proper and made permanent, as the debt was incurred for the benefit of the conjugal partnership. However, the attachment on the two Honda Civic vehicles was correctly lifted by the CA, as they were registered under the name of petitioners’ son, Gerard Angelo Zapanta, who was not a party to the suit. The preliminary attachment only applies to properties of the parties, not of non-parties.