VOL.

349, 363
JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.
*
G.R. No. 135657. January 17, 2001.

JOSE V. LAGON, petitioner,  vs.  HOOVEN

COMALCO INDUSTRIES, INC, respondent.

Appeals;  Evidence;  While factual issues are not

within the province of the Supreme Court, as it is not
a trier of facts and is not required to examine or
contrast the oral and documentary evidence de novo,
nevertheless, the Court has the authority to review
and, in proper cases, reverse the factual findings of
lower courts in exceptional instances.—While factual
issues are not within the province of this Court, as it
is not a trier of facts and is not required to examine
or contrast the oral and documentary evidence de
novo, nevertheless, the Court has the authority to
review and, in proper cases, reverse the factual
findings of lower courts in these instances: (a) when
the findings of fact of the trial court are in conflict
with those of the appellate court; (b) when the
judgment of the appellate court is based on
misapprehension of facts; and, (c) when the appellate
court manifestly overlooked certain relevant facts
which, if properly considered, would justify a
different conclusion. This case falls squarely within
the foregoing exceptions.

Sales;  Credit Transactions;  It is contrary to

common experience that a creditor would take its own
sweet time in collecting its credit, more so when the
amount involved is not minuscule but substantial.—
Even more strange is the fact that HOOVEN
instituted the present action for collection of sum of
money against Lagon only on 24 February 1987, or
more than five (5) years after the supposed
completion of the project. Indeed, it is contrary to
common experience that a creditor would take its
own sweet time in collecting its credit, more so in this
case when the amount involved is not miniscule but
substantial.

Same; Same; Where it is stipulated that deliveries

must be made to the buyer or his duly authorized
representative named in the contracts, the seller is
under obligation to deliver to the buyer only and to no
other, unless the buyer specifically designated
someone to receive the delivery of materials and his
name is written opposite the words Authorized
Receiver/Depository.—As above specifically stated,
deliveries must be made to the buyer or his duly
authorized representative named in the contracts. In
other words, unless the buyer specifically designated
someone to receive the delivery of materials and his
name is written on the Proposals opposite

_______________

* SECOND DIVISION.
 364

364 SUPREME
COURT
REPORTS
ANNOTATED

Lagon vs. Hooven

Comalco Industries, Inc.

the words “Authorized Receiver/Depository,” the

seller is under obligation to deliver to the buyer only
and to no other person; otherwise, the delivery would
be invalid and the seller would not be discharged
from liability. In the present case, petitioner did not
name any person in the Proposals who would receive
the deliveries in his behalf, which meant that
HOOVEN was bound to deliver exclusively to
petitioner.

Same;  Same;  The Court is not unaware of the

slipshod manner of preparing receipts, order slips and
invoices, which unfortunately has become a common
business practice of traders and businessmen.—We
are not unaware of the slipshod manner of preparing
receipts, order slips and invoices, which
unfortunately has become a common business
practice of traders and businessmen. In most cases,
these commercial forms are not always fully
accomplished to contain all the necessary information
describing the whole business transaction. The sales
clerks merely indicate a description and the price of
each item sold without bothering to fill up all the
available spaces in the particular receipt or invoice,
and without proper regard for any legal repercussion
for such neglect. Certainly, it would not hurt if
businessmen and traders would strive to make the
receipts and invoices they issue complete, as far as
practicable, in material particulars. These documents
are not mere scraps of paper bereft of probative value
but vital pieces of evidence of commercial
transactions. They are written memorials of the
details of the consummation of contracts.

Evidence;  Pleadings and Practice;  Litigations

cannot be properly resolved by suppositions,
deductions, or even presumptions, with no basis in
evidence, for the truth must have to be determined by
the hard rules of admissibility and proof.—Given this
pathetic state of respondent’s evidence, how could it
be said that respondent had satisfactorily proved its
case? Essentially, respondent has the burden of
establishing its affirmative allegations of complete
delivery and installation of the materials, and
petitioner’s failure to pay therefore. In this regard, its
evidence on its discharge of that duty is grossly
anemic. We emphasize that litigations cannot be
properly resolved by suppositions, deductions, or even
presumptions, with no basis in evidence, for the truth
must have to be determined by the hard rules of
admissibility and proof.

Same;  Ocular Inspections;  Where the ocular

inspection was made by the trial judge himself at the
request of both parties, for the exclusive purpose of
determining whether the materials subject of the case
were actually delivered and installed, there is no basis
to give little evidentiary value on the results of said
inspection.—The Court of Appeals however faulted
the trial court for supposedly relying solely on the
results of the ocular inspec-
 365

VOL. 349, 365

JANUARY 17,
2001

Lagon vs. Hooven

Comalco Industries, Inc.

tion on the premises, which were not conclusive

since the inspection was conducted several years
after the disputed materials were allegedly installed
therein. We disagree. The ocular inspection was made
by the judge himself, at the request of both petitioner
and respondent, for the exclusive purpose of
determining whether the materials subject of this
case were actually delivered and installed. There is
therefore no basis to give little evidentiary value on
the results of the ocular inspection, as the Court of
Appeals would, and charge the trial court with error
for relying thereon. It is now rather late for any of the
parties to disclaim them, especially when they are
not in his or its favor. Furthermore, a cursory reading
of the decision of the court  a quo  will at once show
that it was not premised solely on the results of the
ocular inspection but was likewise predicated on
other evidence presented by the parties and well-
considered facts and circumstances discussed by the
trial court in its ratio decidendi.We cannot ignore the
factual findings of the trial court, which must carry
great weight in the evaluation of evidentiary facts,
and in the absence of any indication showing grave
error committed by trial court, the appellate court is
bound to respect such findings of fact.

Same;  Admissions;  The silence of one of the

contracting parties and his failure to protest against
the claims of the other party, when he is chargeable
with the duty to do so, strongly suggest an admission
of the veracity and validity of the other party’s claims.
—Petitioner cannot now be heard to complain against
its inclusion in the computation of his liability since
his silence virtually amounted to acquiescence. The
silence of one of the contracting parties and his
failure to protest against the claims of the other
party, when he is chargeable with the duty to do so,
strongly suggest an admission of the veracity and
validity of the other party’s claims.

Same;  A court cannot rely on speculations,

conjectures or guesswork as to the fact of damage but
must depend upon competent proof that they have
indeed been suffered by the injured party and on the
basis of the best evidence obtainable as to the actual
amount thereof.—We are not in accord with the trial
court’s ruling that petitioner is entitled to actual
damages to the extent of the undelivered materials
and undone labor in the amount of P26,120.00. There
is no proof that petitioner already paid for the value
of the undelivered and uninstalled materials to
respondent. Therefore, petitioner may not be deemed
to have suffered any such damage. We have declared
in no uncertain terms that actual or compensatory
damages cannot be presumed but must be proved
with reasonable degree of certainty. A court cannot
rely on speculations, conjectures or guesswork as to
the fact of damage but must depend upon competent
proof that they have indeed been suffered by the
injured party and on the basis of the best
 366

366 SUPREME
COURT
REPORTS
ANNOTATED

Lagon vs. Hooven

Comalco Industries, Inc.

evidence obtainable as to the actual amount

thereof. It must point out specific facts that could
provide the gauge for measuring whatever
compensatory or actual damages were borne.

Damages;  Bad Faith;  Damages;  Moral damages

awarded to a customer where the supplier incurred
bad faith not so much on its breach of contract—
where there was no showing that its failure to comply
with its part of the bargain was motivated by ill will
or done with fraudulent in-tent—but rather on its
appalling temerity to sue the former for payment of an
alleged unpaid balance of the purchase price
notwithstanding knowledge of its failure to make
complete delivery and installation of all the materials
under their contracts,—But we agree with petitioner
that he is entitled to moral damages. HOOVEN’s bad
faith lies not so much on its breach of contract—as
there was no showing that its failure to comply with
its part of the bargain was motivated by ill will or
done with fraudulent intent—but rather on its
appalling temerity to sue petitioner for payment of an
alleged unpaid balance of the purchase price
notwithstanding knowledge of its failure to make
complete delivery and installation of all the materials
under their contracts. It is immaterial that, after the
trial, petitioner was found to be liable to respondent
to the extent of P6,377.66. Petitioner’s right to
withhold full payment of the purchase price prior to
the delivery and installation of all the merchandise
cannot be denied since under the contracts the
balance of the purchase price became due and
demandable only upon the completion of the project.
Consequently, the resulting social humiliation and
damage to petitioner’s reputation as a respected
businessman in the community, occasioned by the
filing of this suit provide sufficient grounds for the
award of P50,000.00 as moral damages.

PETITION for review on certiorari of a decision

of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Rico & Associates for petitioner.
          Florentino & Esmaquel Law Office  for
respondent.

BELLOSILLO, J.:

This petition for review on certiorari seeks to

set aside the Decision of the Court of Appeals of
28 April 1997 which in turn set aside the
decision of the Regional Trial Court of Davao
City and
367

VOL. 349, 367

JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.

ordered petitioner Jose V. Lagon to pay

respondent Hooven Comalco Industries, Inc.
(HOOVEN) the amount of P69,329.00 with
interest at twelve percent (12%) per annum
computed from the filing of the complaint until
1
fully paid, plus attorney’s fees and costs,   as
well as the Resolution of the 2appellate court
denying reconsideration thereof.
Petitioner Jose V. Lagon is a businessman
and owner of a commercial building in
Tacurong, Sultan Kudarat. Respondent
HOOVEN on the other hand is a domestic
corporation known to be the biggest
manufacturer and installer of aluminum
materials in the country with branch office at E.
Quirino Avenue, Davao City.
Sometime in April 1981 Lagon and HOOVEN
entered into two (2) contracts, both
denominated  Proposal,  whereby for a total
consideration of P104,870.00 HOOVEN agreed
to sell and install various aluminum materials
in Lagon’s commercial
3
building in Tacurong,
Sultan Kudarat. Upon execution of the
contracts,4 Lagon paid HOOVEN P48,00.00 in
advance.
On 24 February 1987 respondent HOOVEN
commenced an action for sum of money with
damages and attorney’s fees against petitioner
Lagon before the Regional Trial Court of Davao
City. HOOVEN alleged in its complaint that on
different occasions, it delivered and installed
several construction materials in the
commercial building of Lagon pursuant to their
contracts; that the total cost of the labor and
materials amounted to P117,329.00 out of which
P69,329.00 remained unpaid even after the
completion of the project; and, despite repeated
demands, Lagon failed and refused to liquidate
his indebtedness. HOOVEN also prayed for
attorney’s fees and litigation expenses, and in
support thereof, presented its OIC, Alberto
Villanueva, and its employee, Ernesto Ar-

_______________
1 Decision penned by Associate Justice B.A. Adefuin-de la
Cruz, concurred in by Associate Justices Gloria C. Paras
(now retired) and Ricardo P. Galvez (now Solicitor General).
2 Resolution penned by Associate Justice B.A. Adefuin-de

la Cruz, concurred in by Associate Justices Consuelo

Ynares-Santiago (now Supreme Court Justice) and
Presbitero J. Velasco, Jr.
3 Exhs. “F” and “F-1.”
4 Exh. “G.”

368

368 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.
gente, and other witnesses, as well as several
documentary evidence consisting mainly of the
two (2) proposals, invoices and delivery receipts.
Lagon, in his answer, denied liability and
averred that HOOVEN was the party guilty of
breach of contract by failing to deliver and
install some of the materials specified in the
proposals; that as a consequence he was
compelled to procure the undelivered materials
from other sources; that as regards the
materials duly delivered and installed by
HOOVEN, they were fully paid. He
counterclaimed for actual, moral, exemplary,
temperate and nominal damages, as well as for
attorney’s fees and expenses of litigation.
On 9 October 1987, upon request of both
parties, the trial court conducted an ocular
inspection of Lagon’s commercial building to
determine whether the items alleged in the
complaint and appearing in the invoices and
delivery receipts had been delivered and
installed on the premises. The result of the
ocular inspection was—
1) with respect to the items covered by Exhibit “A”
and submarkings that there are only seventeen (17)
light diffusers, 13 in the ceiling of the ground and 4
on the mezzanine (Ocular Inspection, TSN, pp. 5 to
6); 2) on Exhibit “B” and submarkings, there are only
twenty-three (23) light aluminum boxes, 14
aluminum boxes in the ceiling of the mezzanine and 9
on the ceiling of the ground floor (Ocular Inspection,
TSN, p. 7); 3) on Exhibit “C-1,” the items are missing
in the area where they were supposed to be installed;
4) on Exhibit “C-2,” admitted by defendant Lagon
when he stated that “I will admit that these were
installed by the plaintiff but I do not know exactly
the materials, but I really accept that these were
installed sometime in 1981, before the occupation of
the DBP. But I have paid that already in 1981. I
could not identify the materials delivered in 1981
because I do not know the exact names of those
materials.” (Ocular Inspection, TSN, p. 12); 5) on
Exhibit “C-2,” the glasses are not tinted but plain
white; on Exhibit “C-3,” the materials cannot be
formed (sic) in the place where they are supposed to
be (Ocular Inspection, TSN, p. 7); 6) Exhibit “D” and
“D-1,” that the materials were supplied by plaintiff
but they did not install them. It was the defendant
who caused the installation thereof (Ocular
Inspection, TSN, p. 13.); and 7) Exhibit “E-1,” as
NUMain and Cross-Runners and supplied by plaintiff
but plaintiff did not install. They had it installed
(Ocular Inspection, TSN, p. 14).

369

VOL. 349, 369

JANUARY 17, 2001
Logon vs. Hoouen
Comalco Industries, Inc.

In due course the trial court rendered a decision

partly on the basis of the result of the ocular
inspection finding that the total actual
deliveries and installations made by HOOVEN
cost P87,140.00. Deducting therefrom
P48,000.00 which Lagon paid in advance upon
execution of their contracts with no further
payments appearing to have been made
thereafter, only P39,140.00 remained unpaid
when Lagon incurred in delay. The trial court
also awarded HOOVEN P3,255.00 as attorney’s
fees, but sustained Lagon’s counterclaims and
awarded him P26,120.00 as actual damages
representing the value of the undelivered and
uninstalled materials, and P30,000.00 as
attorney’s fees in addition to litigation expenses
5
of P45,534.50. According to the court a quo —
As a result of the partial breach of contract on
plaintiffs (Hooven Comalco) part, the defendant is
entitled to actual damages only to the extent of the
undelivered materials and undone labor or to the
amount of P26,120.00. This P26,120.00 will be
partially offsetted (sic) to the P39,140.00 unpaid
balance of the defendant (Lagon), so that the
difference that remain (sic) payable to plaintiff is
P13,020.00. Evidence is insufficient to show that bad
faith existed in the filing of the instant complaint for
collection against the defendant. Plaintiff’s obstinate
conduct in prosecuting its claim spending for
litigation expenses and for its lawyers negate the
existence of bad faith. The fact alone that the
findings of fact show an unpaid account of the
defendant is proof that the complaint is not
completely unfounded though evidence shows also
that plaintiff is guilty of partial breach of contract by
reason of failure to completely deliver and install the
materials defendant ordered pursuant to the contract
so that plaintiff is liable for damages. As plaintiff
acted in good faith in the filing of the instant
complaint in the belief that it has a valid cause of
action against the defendant to enforce its claim,
engaging a lawyer to prosecute it, plaintiff is entitled
to a reasonable attorney’s fees equivalent to 25% of
the collectible amount of P13,020.00 or the amount of
P3,225.00. Defendant’s claim of attorney’s fees in the
amount of P152,629.15 is in the opinion of the court
clearly unreasonable and unconscionable considering
the nature of the action and the amount involved.
The court has the power to reduce it to render it
reasonable and conscionable whether the contract for
attorney’s fees is written or oral. The attorney’s fees
is fixed at P30,000.00. The defendant presented
evidence of litigation expenses in-

_______________
5 26 August 1991 Decision penned by Judge Romeo D.
Marasigan, RTC-Br. 16, Davao City.

370

370 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hoouen
Comalco Industries, Inc.

curred in the course of the trial for plane fare of its

lawyer in coming to Davao City from Manila from
1987 up to July 1990 in the total amount of
P34,730.50 as evidenced by Exhibit “11” to “11-E.”
The records show that the defendant’s counsel came
to Davao City from Manila to attend eleven (11)
hearings of the case and the plane fare from 1987 up
to August, 1989 is P2,524.50 and from August 1989 to
June 1990 is P3,007.50. Hotel expenses of defendant’s
counsel at the Maguindanao Hotel where he was
billeted everytime he came to Davao City to attend
the trial amounted to P11,824.00 as evidenced by
Exhibit “17,” the certification issued by the said hotel
management. So that the total amount of the actual
damage suffered by defendant is 245,534.50. Said
amount of P45,534.50 is partially offsetted (sic) by
the amount of P13,020.00 representing the unpaid
obligation of the defendant to the plaintiff so that the
plaintiff is still liable to pay the defendant the
difference in the amount of P32,514.50.

Both parties appealed to the Court of Appeals.

In its Decision of 28 April 1997, the appellate
court set aside the judgment of the trial court
and resolved the case in favor of HOOVEN. It
held that the trial court erred in relying solely
on the results of the ocular inspection since the
delivery and installation of the materials in
question started as early as 1981, while the
ocular inspection was conducted only in 1987 or
six (6) years later, after the entire mezzanine
was altered and the whole building renovated.
The appellate court also stressed that the
testimonies of HOOVEN’s witnesses were
straightforward, categorical and supported by
documentary evidence of the disputed
transactions, and that all Lagon could offer was
a mere denial, uncorroborated and self-serving
statements regarding his transactions with
HOOVEN. The decretal portion of the assailed
decision of the Court of Appeals reads—

ACCORDINGLY, finding the decision of August 26,

1991 appealed from afflicted by reversible errors, the
same is hereby SET ASIDE, and a new one entered
ordering the defendant-appellant (Lagon) to pay
plaintiffappellant (Hooven Comalco):
The amount of P69,329.00 plus interest of 12% per
annum computed from the date of the filing of the
complaint, until fully paid.
 Fifteen percent (15%) of the amount due, as and by
way of attorney’s fees. Defendant-appellant to pay
costs.

371

VOL. 349, 371

JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.

Petitioner’s motion for reconsideration having

been denied he now hopes to secure relief from
this Court by contending that: (a) The Court of
Appeals erred in holding that the trial court
could not rely on the results of the ocular
inspection conducted on his commercial building
in Tacurong, Sultan Kudarat; and, (b) The
assailed decision of the appellate court is based
on speculations and contrary to the evidence
adduced during the trial.
The arguments in the petition ultimately boil
down to the sole issue of whether all the
materials specified in the contracts had been
delivered and installed by respondent in
petitioner’s commercial building in Tacurong,
Sultan Kudarat. The question is basically
factual involving as it does an evaluation of the
conflicting evidence presented by the contending
parties, including the existence and relevance of
specific surrounding circumstances, to
determine the truth or falsity of alleged facts.
 While factual issues are not within the
province of this Court, as it is not a trier of facts
and is not required to examine or contrast the
oral 6 and documentary evidence  de
novo, nevertheless, the Court has the authority
to review and, in proper cases, reverse the
factual findings of lower courts in these
instances: (a) when the findings of fact of the
trial court are in conflict with those of the
appellate court; (b) when the judgment of the
appellate court is based on misapprehension of
facts; and, (c) when the appellate court
manifestly overlooked certain relevant facts
which, if properly considered,
7
would justify a
different conclusion.   This case falls squarely
within the foregoing exceptions.
Before delving into the merits of this case, we
find it necessary to describe and detail the
nature and contents of the vital documentary
exhibits upon which respondent HOOVEN
based its claims, thus—

_______________
6 See Imperial v. Court of Appeals,  G.R. No. 102037, 17
July 1996, 259 SCRA 65, 71.
7  Reyes v. Court of Appeals,  G.R. No. 110207, 11 July

1996, 258 SCRA 651.

372

372 SUPREME COURT

REPORTS
ANNOTATED
 Logon vs. Hooven
Comalco Industries, Inc.

Exhibit “F”—Undated
Proposal:
  I. For the  
supply of
materials and
installation of
suspended
aluminum
ceiling
runners:
  Area: 2,290 sq.  
ft.
  Materials: NU-  
Main & Cross
runners
       NU-5  
Perimeter
mouldings
       G.I. wire  
hangers
       Aluminum  
straps
stiffeners
       Blind P14,110.00
Rivets and
 Screws
       Labor 4,230.00
charge
      18,440.00
  II One (1) set: 1,150.00
65 x 68 YP
aluminum
cladding
      P19,590.00
  Delivery and 1,860.00
Installation
charge
      P21,450.00
  Exhibit “F-  
1”—Proposal
dated 3 April
1981
  “Hooven”  
Aluminum
Casement
Windows
Anolok Finish
Manually
Operated, with
6.0 mm
Brozepane
Tinted Glass
  Five x      126-  
(5) 1/2” (w/
sets: transom)
65”
  One x      126-  
(1) 1/2” (w/
set: AC
65” provision)
  Two x      125-  
(2) 1/2” -do-
sets:
39-
1/2”
  One x      87” -  
(1) do-
set:
39-
1/2”
  One x      223”  
(1) -do-
set:
39-
1/2”
  One x      57-  
(1) 1/2” (w/
set: transom)
65”
  One x      4” -  
 (1) do-
set:
65”
      P42,530.00
  “Hooven”  
Aluminum
Entrances and
Fixed Windows
Anolok Finish,
with 6.0 mm
Bromepane
Tinted Glass
  One (1) set:  
100-1/2” x 76-
1/2,” double
sash, double
acting swing
door, with
transom.
  Two (2) sets: 21,740.00
80” x 278,”
fixed panels
  “Hooven”  
Aluminum
Sliding
Windows
Fabricated
From SD-
Sections,
 Anolok Finish,
with 6.0 mm
Bromepane
Tinted Glass
  One (1) set: 54  
x 191
  One (1) set: 45 11,650.00
x 302
      75,920.00

373

VOL. 349, 373

JANUARY 17, 2001
Logon vs. Hooven
Comalco Industries, Inc.

Add: Delivery 7,500.00

and Installation
charge
      P84,420.00
Exhibit “A”—  
Invoice No.
11094 dated
  29 December  
1982
Eighty Six (86) P3,344.00
Pieces, 2.0 mm
Hishilite
  Diffusers  
Exhibit “B”—  
Invoice No.
11095 dated
  29 December  
1982
  Forty-Three  
Pieces: For
the Supply
and
  Installation  
of Light
Boxes
Fabricated
from
  GA. 032  
Aluminum
Plain Sheet
Delivery and P5,718.00
Installers’
subsistence
Exhibit “C”—  
Invoice No.
14349 dated
  29 December  
 1984
Five Hooven Aluminum
(5) Casementwindows,
sets
1.651
m
3.213
m
    Anolok finish,
manually operated
with
    6.0 Bronzepane tinted
glass.
One - do - with a/c
(1) provision
set
1.651
m
3.367
m
     
Two - do - - do
(2)
sets
1.00
m
3.188
m
One - do - - do
(1)
set
1.00
m
2.210
m
One - do - - do
(1)
set
1.00
m
5.664
m
One - do - - do - with
(1) transom
set
1.651
m
1.461
m
One - do -      with transom
(1)
set
1.651
m
1.880
m
One - do - - do
(1)
set
1.651
m
1.524
m
One Hooven aluminum
(1) double sash, double
set acting swing door,
2.553 with transom, with
m 6.0 mm Bronze-pane
1.943 tinted glass.
m
Two Fixed windows,
(2) Anolok finish.
sets
2.032
m
7.061
m
One Aluminum tubulars
(1) with aluminum
set
.737
m
7.061
m
    YP-100 cladding,
Anolok finish.
One Hooven aluminum
(1) sliding windows
set fabricated
1.143
m
4.851
m
    from SD sections,
Anolok finish, with
6.0 mm Bronzepane
tinted glass, with 1.88
m tubular posts.
One - do P75,291.83
(1)
set
1.143
m
7.671
m
    4% tax 3,011.67
      78,303.50
    Delivery 7,500.00
& Subs.
      P85,803.50

374

374 SUPREME COURT

 REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.

Exhibit “D”—Invoice No.

14265 dated
       29  
September
1984
For the P5,310.00
supply of
materials
and
installation 
     of
aluminum
stucco
embossed
sheet on 
     spiral
staircase
Exhibit “E”—  
Invoice No.
14264 dated
       29  
November
1984
For the supply of
materials and
installation of 
     suspended aluminum
ceiling system.
Materials: NU-4 main
and cross runners
       NU-5 perimeter
mouldings
       GI wire hangers
       Alum strap
stiffeners
       Blind P17,057.00
rivets and
screws
Exhibit “A-  
1”—Delivery
Receipt
dated 
     9 June
1981
Twenty (20)  
pieces Light
boxes
fabricated
from
aluminum
sheets
Forty (40)  
pieces 2.0
mm x 24” x
24” Hishilite
Diffusers
Lump sum  
cost
including
discount and
Delivery and
Installer P4,340.00
Subsistence
Exhibit “A-  
2”—Delivery
Receipt
dated 
     8 August
1981
Twenty (20)  
pieces Light
boxes
fabricated 
     from
.032”
aluminum
plain sheet
Twenty  
Seven (27)
2.0 mm x 24”
x 24”
Hishilite
Diffusers
     Add: P180.00
Delivery &
Installers
Subsistence
Exhibit “A-  
3”—Delivery
Receipt,
dated 8
December
1981
       19 pcs. P40.00
2.0 mm x
2” x 2”
Hishilite
Diffusers
Exhibit “B-1  
—Delivery
Receipt
dated 
     25 June
1981
Additional P140.00
three (3) pcs.
Light boxes
fabricated 
     from .032
Aluminum
sheets
Exhibit “C-  
1”—Delivery
Receipt
dated 
     25 August
1983
To change  
alum tubular
frames for
sliding
windows
       (item 10  
& 11) from
45” L x to
94”x 74.”

375

VOL. 349, 375

JANUARY 17, 2001
Logon vs. Hooven
Comalco Industries, Inc.

To change width  
of one (1) set:
item 1 
     from 126-1/2
to 132-1/2.
To add: one (1)  
set 65”H x 60”
aluminum
casement 
     windows with
6.0 mm tinted
glass.
To extend alum P8,640.00
tubulars of fixed
windows on 
     2nd floor by
29”L and
installation of
YP-aluminum 
     cladding
Exhibit “C-2”—  
Delivery Receipt
dated 
     25 August
1983
Hooven Alum  
Casement
Windows Anolok
Finish
     Manually    
Operated
with 6.0 mm
Bronzepane
     Tinted    
Glass:
Five x 126-1/2”  
(5) with
sets: transom
65”
One x 126-1/2  
(1) set: with AC
65” provision
Two x 125-1/2  
(2) - do
sets:
39-1/2
One x 7” - do  
(1) set:
39-1/2”
One x 223” -  
(1) set: do
39-1/2”
One (l) x 57-1/2”  
set: with
65” transom
One x 74” - do  
(1) set: -
65”
      P42,530.00
Hooven Alum  
Entrances &
Fixed Windows
Anolok
Finish with    
6.0 mm
Bronzepane
Tinted
Glass:
One (1) set: 100-  
1/2 x 76-1/2,
double sash, 
double acting
swing door, with
transom
Two (2) sets: 80” P21,740.00
x 278” fixed
panels
Exhibit “C-3”—  
Delivery Receipt
dated 
     25 August
1983
Hoven Alum  
Sliding Windows
Fabricated from 
     SD Sections
Anolok Finish
with 6.0 mm 
     Bronzepane
Tinted Glass:
     
One (1) set: 45” x  
191”
One (1) set: 45” x P11,650.00
302”
Add:   7,500.00
Delivery
and
Installation
Less: 7% 6,256.50
Discount
      P77,163.50
Exhibit “D-1”—  
Delivery Receipt
dated 
     25 August
1983
For the supply of  
materials and
installation of 
     aluminum
stucco embossed
sheet on spiral
 376

376 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.

       staircase: P5,310.00
One (1) set
32” H x 304”
WL
Exhibit “E-  
1”—Delivery
Receipt dated 
     25 August
1983
NU- main and  
cross runners
NU-5  
Perimeter
mouldings
G.I. Wire  
Hangers
Aluminum  
straps
stiffeners
Blind rivets P17,057.00
and screws

We have carefully and diligently considered the

foregoing exhibits and we are fully convinced
that the mass of documentary evidence adduced
by respondent suffers from patent irregularities
and material inconsistencies on their faces,
raising serious questions requiring cogent
explanations. These flaws inevitably deplete the
weight of its evidence, with the result that for
lack of the requisite quantum of evidence,
respondent dismally failed in the lower court to
discharge its burden necessary to prevail in this
case.
Firstly, the quantity of materials and the
amounts stated in the delivery receipts do not
tally with those in the invoices covering them,
notwithstanding that, according to HOOVEN
OIC Alberto Villanueva, the invoices
8
were based
merely on the delivery receipts.   For instance,
only eleven (11) items were listed in Exhs. “C-2”
and “C-3” with a total worth of P77,163.50. But
in Exh. “C” which was the invoice for Exhs. “C-
2” and “C-3,” there were thirteen (13) items
enumerated for a total worth of P85,803.50. If
Exh. “C” is supposed to be based on Exhs. “C-2”
and “C-3,” we cannot understand the apparent
discrepancy in the items listed in those
documents when they all referred to the same
materials.
Secondly, the total value of the materials as
reflected in all the invoices is P117,329.00 while
under the delivery receipts it is only
P112,870.50, or a difference of P4,458.00.
Moreover, the materials listed in the two
(2)  Proposals,  upon which HOOVEN based its
claims, is only for the total sum of P104,870.00.
Curiously then, why would the materials
supposedly delivered by HOOVEN be more than
what was contracted and purchased by
Lagon? This

_______________
8 TSN, 8 September 1988, p. 98.

377

VOL. 349, 377

JANUARY 17, 2001
Logon vs. Hooven
Comalco Industries, Inc.

circumstance underscores the need to

reexamine the strength, if not weakness, of
respondent’s cause.
Thirdly, under the  Proposals  HOOVEN
bound itself to invoice the materials “when
complete and ready for shipment.” Oddly, the
records show that the invoices were prepared
several years after the materials were allegedly
delivered and installed completely on
petitioner’s building. Alberto Villanueva
testified that their project with petitioner was
completed sometime in August 1981 and that
thereafter no further installation was done in
 9
the building.  But the disputed invoices marked
Exhs. “A” and “B” were prepared only on 29
December 1982; Exhs. “C” and “D” were
prepared only on 29 December 1984; and, Exh.
“E” was prepared only on 29 November 1984. As
for the delivery receipts, Exhs. “C-1,” “C-2,” “C-
3” and “E-1” were prepared only on 25 August
1983 or two (2) years after the completion of the
project, while Exh. “A-3” was prepared only on 8
December 1981 or some four (4) months after
the date of completion.
Even more strange is the fact that HOOVEN
instituted the present action for collection of
sum of money against Lagon only on 24
February 1987, or more than five (5) years after
the supposed completion of the project. Indeed,
it is contrary to common experience that a
creditor would take its own sweet time in
collecting its credit, more so in this case when
the amount involved is not miniscule but
substantial.
Fourthly,
10
the demand letter of 25 August
1983 sent to petitioner by respondent further
betrays the falsity of its claims—
Dear Mr. Lagon:

The bearer, Mr. Fennin Piñero, is an authorized

representative of this company. He will arrange for
your acceptance of the complete aluminum and glass
installation we have undertaken for your building.
He has with him the delivery receipts for your
signature so with a statement of account showing
your balance. Kindly favor us with a partial payment
to cover our operation costs. Also kindly relay to him
all other installations you wish us to undertake.
_______________
9 TSN, 2 June 1989, pp. 243-244.
10 Exh. “H.”

378

378 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.

Hoping for your favorable action, we shall remain.

Very Truly Yours, 
Hooven Comalco Industries, Inc. 
Davao Branch 
(Sgd.) Alberto P. Villanueva

If, as claimed by HOOVEN, all the materials

were completely delivered and installed in
petitioner’s building as early as August 1981,
why then would it demand partial payment only
two (2) years later? This circumstance is very
significant especially considering that under
the  Proposals  the terms of payment should be
50% down “and the  balance to be paid in
full” upon completion. Moreover, it is surprising
that the partial payment demanded was only “to
cover operation costs.” As correctly observed by
petitioner, demand for payment of operation
costs is typical of a still on-going project where
the contractor needs funds to defray his
expenses. If there was complete installation,
why would respondent demand payment for
operation costs only? Why not enforce the whole
amount of indebtedness? All these clearly
suggest that there was no full and complete
delivery and installation of materials ordered by
petitioner.
Fifthly, all the delivery receipts did not
appear to have been signed by petitioner or his
duly authorized representative acknowledging
receipt of the materials listed therein. A closer
examination of the receipts clearly showed that
the deliveries were made to a certain Jose
Rubin, claimed to be petitioner’s driver,
Armando Lagon, and a certain bookkeeper.
Unfortunately for HOOVEN, the identities of
these persons were never been established, and
there is no way of determining now whether
they were indeed authorized representatives of
petitioner. Paragraph 3 of each  Proposal  is
explicit on this point—
3. x x x the seller’s responsibility ends with delivery
of the merchandise to carrier in good condition, to
buyer, or to buyer’s authorized
“Receiver/Depository”  named on the face of this
proposal (italics supplied).

As above specifically stated, deliveries must be

made to the buyer or his duly authorized
representative named in the contracts.  In other
words, unless the buyer specifically designated
someone to
379
 VOL. 349, 379
JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.

receive the delivery of materials and his name is

written on the  Proposalsopposite the words
“Authorized Receiver/Depository,” the seller is
under obligation to deliver to the buyer only and
to no other person; otherwise, the delivery
would be invalid and the seller would not be
discharged from liability. In the present case,
petitioner did not name any person in
the  Proposals  who would receive the deliveries
in his behalf, which meant that HOOVEN was
bound to deliver exclusively to petitioner.
Sixthly, it is also obvious from the contested
delivery receipts that some important details
were not supplied or were left in
blank,  i.e.,  truck numbers, persons who
delivered the materials, invoice and s.o.
numbers. The persons who delivered the
materials were potential witnesses who could
shed light on the circumstances surrounding the
alleged deliveries of the materials to petitioner.
Moreover, it could have been easier for
HOOVEN to pinpoint responsibility to any of its
employees for the non-delivery of the materials.
We are not unaware of the slipshod manner
of preparing receipts, order slips and invoices,
which unfortunately has become a common
business practice of traders and businessmen.
In most cases, these commercial forms are not
always fully accomplished to contain all the
necessary information describing the whole
business transaction. The sales clerks merely
indicate a description and the price of each item
sold without bothering to fill up all the available
spaces in the particular receipt or invoice, and
without proper regard for any legal repercussion
for such neglect. Certainly, it would not hurt if
businessmen and traders would strive to make
the receipts and invoices they issue complete, as
far as practicable, in material particulars. These
documents are not mere scraps of paper bereft
of probative value but vital pieces of evidence of
commercial transactions. They are written
memorials of the details of the consummation of
contracts.
Given this pathetic state of respondent’s
evidence, how could it be said that respondent
had satisfactorily proved its case? Essentially,
respondent has the burden of establishing its
affirmative allegations of complete delivery and
installation of the materials, and petitioner’s
failure to pay therefore. In this regard, its
evidence on its discharge of that duty is grossly
anemic. We emphasize that
380

380 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.
litigations cannot be properly resolved by
suppositions, deductions, or even presumptions,
with no basis in evidence, for the truth must
have to be determined by the hard rules of
admissibility and proof.
The Court of Appeals however faulted the
trial court for supposedly relying  solely  on the
results of the ocular inspection on the premises,
which were not conclusive since the inspection
was conducted several years after the disputed
materials were allegedly installed therein.
We disagree. The ocular inspection was made
by the judge himself, at the request of both
petitioner and respondent, for the exclusive
purpose of determining whether the materials
subject of this case were actually delivered and
installed. There is therefore no basis to give
little evidentiary value on the results of the
ocular inspection, as the Court of Appeals
would, and charge the trial court with error for
relying thereon. It is now rather late for any of
the parties to disclaim them, especially when
they are not in his or its favor. Furthermore, a
cursory reading of the decision of the court  a
quo will at once show that it was not premised
solely on the results of the ocular inspection but
was likewise predicated on other evidence
presented by the parties and well-considered
facts and circumstances discussed by the trial
court in its  ratio decidendi.  We cannot ignore
the factual findings of the trial court, which
must carry great weight in the evaluation of
evidentiary facts, and in the absence of any
indication showing grave error committed by
trial court, the appellate court is bound to
respect such findings of fact.
We hasten to add however that petitioner is
not entirely free from any liability to
respondent. Petitioner admitted the delivery of
materials under Exhs. “A” and its submarkings,
“B” and its submarkings, “D,” “D-1” and “E.”
With respect to Exh. “C-2,” petitioner
acknowledged his obligation under the first
heading, Items Nos. 3, 4 and 5, and the second
heading, and denied the rest. Consequently, he
should be made liable therefore in the total
amount of P58,786.65. From this amount,
petitioner’s down payment of P48,000.00 should
be deducted.
It is insisted by petitioner in his appeal brief
filed before the Court of Appeals that the second
item under the second heading of
381

VOL. 349, 381

JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.

Exh. “C-2” should be excluded in the

computation since he never admitted liability
therefore.
We are not persuaded. The transcript of
stenographic notes shows that during the ocular
inspection counsel for respondent manifested in
effect that petitioner admitted the delivery and
installation of the second item in his building,
and petitioner did not interpose any objection to
respondent’s manifestation—

ATTY. QUIÑONES: We would like to make of

record that defendant (Lagon) admits that
plaintiff (Hooven Comalco) delivered and
installed Item No. 1 under the second column
of Exhibit “C-2” which is the front door of the
ground floor.
ATTY. RICO: Defendant however adds that
these were installed in 1981 and had already
paid for the said item.
ATTY. QUINOÑES: I would like to make of
record also that defendant admits the
delivery and installation of Item No. 2 under
the second column of Exhibit “C-2” as having
been delivered and installed by the plaintiff
in 1981 with the qualification, however, that
he had already paid the same.
COURT: Are you stating that all these installed
items on the ground floor were all paid by
you? 11
MR. LAGON: Yes, Your Honor.

Petitioner cannot now be heard to complain

against its inclusion in the computation of his
liability since his silence virtually amounted to
acquiescence. The silence of one of the
contracting parties and his failure to protest
against the claims of the other party, when he is
chargeable with the duty to do so, strongly
suggest an admission of the veracity and
validity of the other party’s claims.
 In sum, petitioner’s total liability to
respondent may be computed as follows:

(1) Items under P

Exh. “A,” 680.00
consisting
of 17 
light
diffusers at
P40.00 each
(2) Items under 3,220.00
Exh. “B,”
consisting
of 23 
light boxes
at P40.00
each

_______________
11 TSN, 9 October 1987, pp. 12-13 (Ocular Inspection).

382

382 SUPREME COURT

REPORTS
ANNOTATED
Lagon vs. Hooven
Comalco Industries, Inc.

(3) Third, fourth 14,176.65

 and fifth
items under
the first
heading of
Exh. “C-2”
which on the
basis of their
measurements
constitute
only 1/3 of the
total costs of
materials
listed therein
(4) Items under 21,740.00
the second
heading of
Exh.“C-2”
(5) Items under 4,860.00
Exhs. “D” and
“D-1”
(6) Items under 14,110.00
Exh. “E-1”
    P58,786.65
Less: Stipulated 4,408.99
7% discount
    P54,377.66
Less: Advance 48,000.00
payment made by
petitioner to
Hooven Comalco
Unpaid Balance P6,377.66
of petitioner

Notwithstanding the breach of contract by

respondent in failing to deliver and install in
the premises of petitioner all the stipulated
materials, we nevertheless accede to the right of
respondent to recover the unpaid balance from
petitioner for the materials actually delivered.
The next point of inquiry is the propriety of
awarding damages, attorney’s fees and
litigation expenses.
We are not in accord with the trial court’s
ruling that petitioner is entitled to actual
damages to the extent of the undelivered
materials and undone labor in the amount of
P26,120.00. There is no proof that petitioner
already paid for the value of the undelivered
and uninstalled materials to respondent.
Therefore, petitioner may not be deemed to have
suffered any such damage. We have declared in
no uncertain terms that actual or compensatory
damages cannot be presumed but must 12 be
proved with reasonable degree of certainty.   A
court cannot rely on speculations, conjectures or
guesswork as to the fact of damage but must
depend upon compe-

_______________
 12  Del Mundo v. Court of appeals,G.R. No. 104576, 20
January 1995,  240 SCRA 348;  Development Bank of the
Philippines v. Court of Appeals, G.R. No. 110053, 16 October
1995, 249 SCRA 331; Del Rosario v. Court of Appeals, G.R.
No. 118325, 29 January 1997, 267 SCRA 158, 171.

383

VOL. 349, 383

JANUARY 17, 2001
Lagon vs. Hooven
Comalco Industries, Inc.

tent proof that they have indeed been suffered

by the injured party and on the basis of the best
evidence13 obtainable as to the actual amount
thereof.   It must point out specific facts that
could provide the gauge for measuring whatever
compensatory or actual damages were borne.
But we agree with petitioner that he is
entitled to moral damages. HOOVEN’s bad faith
lies not so much on its breach of contract—as
there was no showing that its failure to comply
with its part of the bargain was motivated by ill
will or done with fraudulent intent—but rather
on its appalling temerity to sue petitioner for
payment of an alleged unpaid balance of the
purchase price notwithstanding knowledge of its
failure to make complete delivery and
installation of all the materials under their
contracts. It is immaterial that, after the trial,
petitioner was found to be liable to respondent
to the extent of P6,377.66. Petitioner’s right to
withhold full payment of the purchase price
prior to the delivery and installation of all the
merchandise cannot be denied since under the
contracts the balance of the purchase price
became due and demandable only upon the
completion of the project. Consequently, the
resulting social humiliation and damage to
petitioner’s reputation as a respected
businessman in the community, occasioned by
the filing of this suit provide sufficient grounds
for the award of P50,000.00 as moral damages.
Moreover, considering the fact that petitioner
was drawn into this litigation by respondent
and was compelled to hire an attorney to protect
and defend his interest, and taking into account
the work done by said attorney throughout the
proceedings, as reflected in the record, we deem
it just and equitable to award attorney’s fees14
for
petitioner in the amount of P30,000.00.   In
addition, we agree

_______________
13 Del Rosario v. Court of Appeals, id.
14 Art. 2208. In the absence of stipulation, attorney’s fees

and expenses of litigation, other than judicial costs, cannot

be recovered, except: (1) When exemplary damages are
awarded; (2) When the defendant’s act or omission has
compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest; (3) In criminal cases
of malicious prosecution against the plaintiff; (4) In case of a
clearly unfounded civil action or proceeding against the
plaintiff; (5) Where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff’s valid,

384
384 SUPREME COURT
REPORTS
ANNOTATED
Logon vs. Hoouen
Comalco Industries, Inc.

with the trial court that petitioner is entitled to

recover P46,554.50 as actual damages including
litigation expenses as this 15
amount is sufficiently
supported by the evidence.
WHEREFORE, the assailed Decision of the
Court of Appeals dated 28 April 1997 is
MODIFIED. Petitioner Jose V. Lagon is ordered
to pay respondent Hooven Comalco Industries,
Inc., P6,377.66 representing the value of the
unpaid materials admittedly delivered to him.
On the other hand, respondent is ordered to pay
petitioner P50,000.00 as moral damages,
P30,000.00 as attorney’s fees and P46,554.50 as
actual damages and litigation expenses.
SO ORDERED.

          Mendoza,  Quisumbing,  Buena  and  De

Leon, Jr., JJ., concur.

Decision modified.

Notes.—As the term imparts, an ocular

inspection is one by means of actual sight or
viewing—what is visual to the eye though, is
not always reflective of the real cause behind.
(Southeastern College, Inc. vs. Court of
Appeals, 292 SCRA 422 [1998])
 For sure, conducting ocular inspections is
only one way of ensuring compliance with laws
and rules relative to the professional practice of
electrical engineering, but it certainty is not the
only way. (Philippine Registered Electrical
Practitioners. Inc. [PREPI] vs. Francia, Jr., 322
SCRA 587 [2000])

_______________

just and demandable claim; (6) In actions for legal

support; (7) In actions for the recovery of wages of household
helpers, laborers and skilled workers; (8) In actions for
indemnity under the workmen’s compensation and
employer’s liability laws; (9) In separate civil action to
recover civil liability arising from a crime; (10) When at
least double judicial costs are awarded; and (11) In any
other case where the court deems it just and equitable that
attorney’s fees and expenses of litigation should be
recovered. In all cases, the attorney’s fees and expenses of
litigation must be reasonable (New Civil Code).
15  The trial court erroneously computed the amount of

litigation expenses it awarded to petitioner, instead of

P45,534.50 it should be P46,554.50.

385

VOL. 349, 385

JANUARY 17, 2001
People vs. Toyco, Sr.

Business forms, e.g.,  order slip, delivery charge

invoice and the like, which are issued by the
seller in the ordinary course of business are not
always fully accomplished to contain all the
 necessary information describing in detail the
whole business transaction—more often than
not they are accomplished perfunctorily without
proper regard to any legal repercussion for such
neglect such that despite their being often
incomplete, said business forms are commonly
recognized in ordinary commercial transactions
as valid between the parties and at the very
least they serve as an acknowledgment that a
business transaction has in fact transpired.
(Donato C. Cruz Trading Corporation vs. Court
of Appeals, 347 SCRA 13 [2000])

——o0o——

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