G.R. No. L-22358 January 29, 1975
PIO BARRETTO SONS, INC., petitioner, vs. COMPAÑIA MARITIMA, respondent.

FACTS

Petitioner Pio Barretto Sons, Inc. filed a complaint for collection of a sum of money against respondent Compañia Maritima in the Court of First Instance of Manila. The petitioner alleged that during October, November, and December 1941, the respondent purchased lumber on credit, incurring a total indebtedness of P6,054.36 with stipulated interest. The respondent denied the material allegations and interposed a counterclaim. The trial court rendered judgment in favor of the petitioner, ordering the respondent to pay the principal sum with legal interest from the filing of the complaint and attorney’s fees.
Both parties appealed to the Court of Appeals. The petitioner assigned as error the trial court’s refusal to award the stipulated 12% interest, while the respondent raised errors challenging the sufficiency of proof of the claims, payment, cause of action, and prescription. The Court of Appeals reversed the trial court’s decision and ordered the dismissal of the case. It held that the delivery of the lumber by the petitioner to the respondent was not duly proven. The petitioner’s motion for reconsideration was denied, prompting this petition for review.

ISSUE

Whether the Court of Appeals erred in deciding the case based on the issue of delivery, which the petitioner contends was a new issue not raised in the pleadings before the lower courts.

RULING

The Supreme Court ruled that the Court of Appeals did not err. The issue of delivery was not a new issue. In a contract of sale, delivery and payment are fundamentally interrelated and complementary obligations. Under Article 1458 of the Civil Code, a contract of sale obligates the seller to transfer ownership and deliver a determinate thing, and the buyer to pay a price. Therefore, to recover payment, the seller must prove not only the sale but also the delivery of the goods. The petitioner’s cause of action, whether based on contract or quasi-contract for unjust enrichment, hinged on the vital element of delivery.
The Court of Appeals’ finding of no sufficient proof of delivery was well-founded. The petitioner’s evidence consisted primarily of invoices and counter-receipts. However, the testimonies of the petitioner’s own witnesses revealed a lack of personal knowledge regarding the preparation of these documents or the actual delivery of the lumber. The counter-receipts merely acknowledged receipt of statements for review, not the lumber itself. The Supreme Court concurred with the appellate court’s assessment that the petitioner failed to discharge its burden of proving delivery by preponderance of evidence. Consequently, the judgment of the Court of Appeals was affirmed.