azajar vs. solid one

REPUBLIC OF THE PHILIPPINES

REPUBLIC OF THE PHILIPPINES

NATIONAL CAPITAL JUDICIAL REGION

METROPOLITAN TRIAL COURT

BRANCH 53, CALOOCAN CITY

MERLE AZAJAR, doing business

under the name and style of

PRECISE MOTOR REWINDING SHOP

represented by FRANCISCO LEE AZAJAR,

Plaintiff,

-versus-

Civil Case No. 13-30309

For: Sum of Money with Damages

SOLID ONE MILLS, PHILS., INC.,

Defendant.

x----------------------------------x

O R D E R

This is an action for Sum of Money with Damages.

Plaintiff is of legal age, Filipino and a resident of Block 24, Lot 12, Phase 3-D Dagat-Dagatan, Kaunlaran Village, Caloocan City. She is represented by her Attorney-in-fact, Francisco Lee Azajar.

Defendant is a corporation duly organized and existing under Philippine laws with principal office at No. 55 Aragon St., San Francisco Del Monte, Quezon City.

On 15 December 2011, plaintiff instituted the present case against the defendant. Summons together with the copy of the complaint and its annexes were served upon the defendant at its given address. Thereafter, defendant filed its Answer with Counterclaim on 24 January 2012.

The case was initially set for preliminary conference, thereafter, it was referred to the Philippine Mediation Center but parties failed to arrive into settlement, hence, the preliminary conference was terminated with the following issues submitted for resolution of this Court:

1. Whether or not the plaintiff has a cause of action against the defendant;

2. Whether or not the plaintiff is entitled to the reliefs sought in the complaint;

3. Whether or not the plaintiff failed to deliver the motors fit to defendant's business knowing fully well that it is to be used/utilized in a high-dust environment;

4. Whether or not the defendant is entitled to its counter-claims, damages and attorney's fees.

Trial ensued. Plaintiff presented her lone witness in the person of Francisco Lee Azajar. He testified that defendant requested for two (2) units of Lincoln Induction Motor, 150HP, 440v converted from 1800 rpm, a surplus reconditioned motor. A quotation was prepared and faxed to the defendant who sent it back to them with notation APPROVED. A purchase order was subsequently issued in their favor, thereafter, delivery of the motors followed evidenced by the service invoice received and signed by defendant's representative. Defendant despite repeated demands failed to pay the said motors.

Plaintiff rested her case with formal offer of documentary exhibits which were admitted by the Court in the Order dated 27 July 2012. Thereafter, presentation of defendant's evidence proceeded.

Defendant initially offered the testimony of Jaime V. Santiago, defendant corporation's president who testified that Precise Rewinding Motor (Precise for brevity) is their company's regular supplier. Precise through Mr. Azajar, offered him the Lincoln induction motors (subject of this collection case). He informed Mr. Azajar to submit the quotation to their purchasing department, which Mr. Azajar timely did. Subsequently, purchase order for said induction motors were prepared and delivery was made thereafter.

After receipt of the motors, he received a call from their plant engineer informing him that said induction motors were not fit for their plant operation use because the motors were open-type and they are operating a (the) feed mill, which by its nature is (in) a very dusty environment. He tried to call Mr. Azajar to inform him of their predicament but his call was never returned. (he never received a return call.)

After a month, metal boxes were voluntarily provided by the plaintiff to cover and prevent the dust from entering the induction motors. However, after discussing (a discussion) the problem with the plant engineer regarding the open-type motors and the metal covers, it was agreed that (was held, they arrived into agreement that) it is not advisable (fit) to cover the induction motors because there will be no ventilation, the heat from the induction motors will accumulate inside the metal housing/encasement and the motors might eventually explode which will put their business and personnel at risk.

He thereafter instructed the purchasing department to return the motors and its covers but Precise did not let their personnel unload the items.

Presented next on the witness stand for the defendant was Bonifacio Lopez, defendant corporation's Plant Engineer. He testified that he rejected the open-type motors the moment he saw them because the motors were not fit to the kind of environment they have. Such fact was communicated to Mr. Santiago, the president of Solid One and to Mr. Azajar, of Precise, who instead of replacing the motors sent metal boxes. He also rejected the metal boxes sent by Mr. Azajar because it was not precision-designed to fit the motors, and will be very prone to overheating and which will eventually produce the same disastrous results.

An expert witness in the person of Daniel L.K. Ching was also presented by the defendant who testified that an open-type motor is primarily used in dust free environments and not suitable for feed mills. He also testified on the distinction between an open-type and a totally enclosed fan type motor.

Thereafter, defendant formally offered its documentary exhibits which drew comment/opposition from the plaintiff. Thereafter, Exhibits 1, 2, 5, 11, 12, 13 inclusive of its sub-markings and 15 together with the Judicial Affidavit of Mr. Bonifacio Lopez were admitted by the Court in the Order dated 27 September 2013.

Prefatorily, a cause of action is the act or omission by which a party violates a right of another. During the preliminary conference, parties stipulated on the existence of the Purchase Order No. 19852 which prompted the delivery of the two (2) units of Lincoln induction motors (surplus) 150HP, 440v, 1150 converted from 1800 rpm to 1150 rpm 3-phase. Its non-payment despite repeated demands gave rise to the existence of a cause of action.

All other issues raised in this action can be reduced to (the) a simple question: whether or not the quality of the motors delivered fit for its intended purpose?

Parties stipulated and admitted on the existence of the purchase order including the amount and the terms indicated therein. Defendant also admitted that subject motors were delivered and received by its representative evidenced by the service invoice. Since the issues raised during the preliminary conference can be reduced to the quality or fitness of the motors for defendant's business, Article 1562 in relation to Article 1564 of the New Civil Code finds application. The provisions read as follows:

Article 1562. In a sale of goods, there is an implied warranty or condition as to the quality or fitness of the goods, as follows:

(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are acquired, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for the purpose;

(2) xxx xxx xxx

Article 1564. An implied warranty or condition as to the quality or fitness for a particular purpose may be annexed by the usage of trade.

The quotation as well as the purchase order presented by the plaintiff, as evidence, stated that the motors are intended for defendant's pellet-mill (spare and local). The inclusion of the intended use is a notice to the seller of the purpose why defendant was purchasing said items.

Plaintiff's representative testified that Precise was serving the defendant corporation for three (3) to four (4) years for their motor rewinding requirements. Hence, plaintiff is more or less familiar with the kind of operation defendant corporation has. Defendant on the other hand claimed that the motors were open-type and not fit to the kind of environment their business has, the very reason why they were trying to return the motors but plaintiff provided metal boxes instead.

Mr. Azajar during his testimony admitted that Precise indeed provided said metal boxes but he does not know why the defendant requested for that. He testified that plaintiff provide such metal boxes for free because defendant is a customer.

The foregoing create impression to the mind of this Court that indeed the motors were not fit to the kind of environment defendant corporation has because this posited the business and their personnel at risk.

The Court is inclined to believe that the metal boxes were provided to cure the defect of the open-type motors. It is very unlikely that plaintiff gave such metal boxes without asking the defendant of the purpose and reason why they were requesting for it and surprisingly, the metal covers were given for free. Ordinary human experience dictates that one will inquire on the reason behind each request before heeding to it. Moreso, in case of the plaintiff who is (in the) a businessman and the production or fabrication of said metal boxes would necessarily entail cost on her part.

The Court notes the testimony of Mr. Azajar that Precise delivered the open-type motors based on the purchased order issued by the defendant. He reasoned that the purchase order indicates Lincoln type motor and it is understood that if it is Lincoln type, it is an open-type motor. This was negated by the testimony of Daniel Ching (expert witness) who testified that he does not agree with Atty. Garcia when he said that Lincoln motors produces only open-type motors.

Anent the modification of the motor speed, Mr. Azajar (plaintiff's representative) claimed that the request for conversion was made before the delivery of the subject motors. Such request was not indicated in the purchase order, service invoice and in the quotation because it is already understood.

As admitted by Mr. Azajar, the modification of the speed from 1800 rpm to 1150 rpm 3-phase was not written on any of the foregoing documents. Plaintiff founded her claim in the purchase order issued by the defendant. Mr. Azajar testified that the defendant requested for two units of Lincoln Induction Motor, 150 HP, 440v, converted from 1800 rpm, surplus reconditioned motor. After such request, quotation was sent to the defendant who approved for two (2) units of motor. Delivery followed thereafter.

Since the agreement before purchase order and the service invoice were issued, it is but safe to say that their agreement were all reflected in the documents. As such, the seller failed to comply with the requirements of the defendant, thus, justifying its act of rejecting the delivered motors for its failure to comply with the specification.

WHEREFORE, foregoing considered, the case against Solid One Mills, Phils., Inc. is hereby DISMISSED. Defendant is ordered to return the two (2) units of Lincoln induction motors (surplus) 150HP, 440v, 1150 converted from 1800 rpm to 1150 rpm 3-phase to the plaintiff.

The counterclaim filed by against the plaintiff is also DISMISSED.

SO ORDERED.

03 January 2014, Caloocan City.

DENNIS J. RAFA

Acting Presiding Judge

Section 1, Rule 131, Revised Rules of Court:

Section 1: Burden of Proof. - Burden of proof is the duty of the party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law.

Article 1563. In the case of contract of sale of a specified article under its patent or other trade name, there is no warranty as to its fitness for any particular purpose, unless there is a stipulation to the contrary.Webster Dictionary defines warranty as a written agreement of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts.

Plaintiff alleged that she delivered two (2) units of Lincoln Induction Motor (surplus) 150 HP, 440v, converted from 1800 rpm to 1150 rpm 3-phase to the defendant in the amount of Two Hundred Eighty Thousand Pesos (Php280,000.00). They agreed that the same will be payable in post dated check, thirty (30) days after its delivery.

The items were delivered and received by the defendant's employee in good order and condition without any protest, reservation or complaint but defendant failed to issue the post dated check, as agreed mode of payment, upon the induction motors' delivery. Despite repeated demands, defendant still failed and refused to pay the Lincoln induction motors.

Defendant, on the other hand claimed that plaintiff offered spare motors for the latter's pellet mills. Jaime Santiago (defendant corporation's president) informed the plaintiff that the motor should be originally low speed. Francisco Lee Azajar (plaintiff's representative) assured him that it is a low speed surplus. Purchase order was subsequently issued in favor of the plaintiff to reflect the agreement, thereafter, delivery of the motors followed.

When the supervisors and technical people saw that the motors were open type and unfit for the kind of environment they have, they attempted to return the items but plaintiff refused to accept the same. Instead, she (plaintiff) sent a metal cover for the motors. Again, attempt to return the items were made because the metal covers can still put its business and employees in danger but unavailing.

The agreement to buy

Defendant on the other hand claimed that it was the plaintiff who offered them the induction motors

The testimony of Mr. Azajar enumerates the turn of events which give rise to the delivery of the induction motors and subsequently, the defendant's failure to pay the same.

Furthermore, Section 9, Rule 130 of the Revised Rules of Court states that:

Sec. 9: Evidence of written agreements. - When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

However, a party may present evidence to modify, explain or add to the terms of the written agreement if puts in issue in his pleading:

a.An intrinsic ambiguity, mistake or imperfection in the written agreement;

b.The failure of the written agreement to express the true intent and agreement of the parties thereto;

c.The validity of the written agreement; or

d.The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term agreement includes wills.

Paragraph 4 of the complaint in part states that xxx xxx xxx; on April 8, 2011, plaintiff rendered service and delivered in favor of the defendant for the agreed fee in the amount of Two Hundred Eighty Thousand Pesos (P280,000.00) payable within thirty (30) days from date of such delivery the supply of Two (2) units of Lincoln Induction Motor (surplus) 150 HP, 440v, converted from 1800 rpm to 1150 rpm 3-phase. Xxx xxx xxx (underscoring supplied). Other than said allegation, the conversion was never put as an issue in the complaint for the Court to admit parol evidence as to the existence of the alleged request for modification. Since the plaintiff was claiming that such request for modification exist, he has the burden of proving the same by the amount of evidence required by law. No evidence was presented by the plaintiff to prove such allegation other that his testimony given in open court that the conversion is understood.

Section 1, Rule 133, Revised Rules of Court

Section 1. Preponderance of evidence, how determined. - In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses' manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.R.A. 7394 The Consumer Act of the Philippines

Article 100.Liability for Product and Service Imperfection. The suppliers of durable or nondurable consumer products are jointly liable for imperfections in quality that render the products unfit or inadequate for consumption for which they are designed or decrease their value, and for those resulting from inconsistency with the information provided on the container, packaging, labels or publicity messages/advertisement, with due regard to the variations resulting from their nature, the consumer being able to demand replacement to the imperfect parts.

If the imperfection is not corrected within thirty (30) days, the consumer may alternatively demand at his option:

a) the replacement of the product by another of the same kind, in a perfect state of use;

b) the immediate reimbursement of the amount paid, with monetary updating, without prejudice to any losses and damages;

c) a proportionate price reduction.

The parties may agree to reduce or increase the term specified in the immediately preceding paragraph; but such shall not be less than seven (7) nor more than one hundred and eighty (180) days.

The consumer may make immediate use of the alternatives under the second paragraph of this Article when by virtue of the extent of the imperfection, the replacement of the imperfect parts may jeopardize the product quality or characteristics, thus decreasing its value.

If the consumer opts for the alternative under sub-paragraph (a) of the second paragraph of this Article, and replacement of the product is not possible, it may be replaced by another of a different kind, mark or model: Provided, That any difference in price may result thereof shall be supplemented or reimbursed by the party which caused the damage, without prejudice to the provisions of the second, third and fourth paragraphs of this Article.Read in relation to 1567 NCC, 1571Plaintiff delivered an open type motor, knowing fully well that defendant is engaged in a feed mill business. She also delivered metal boxes for free without asking for its purpose. In the ordinary course of human experience, one will not give something without asking why that thing should be given especially so if that thing will entail cost. TSN dated 15 June 2012 pages 17 - 20

WHEN DOES THE AGREEMENT CONCLUDE? WAS IT WITHIN THE AMBIT OF RULE ON PAROL EVIDENCE... COPY RULE ON PAROL EVIDENCE

- SEC 9 RULE 130 RULE ON PAROL EVIDENCE

- purpose of warranty

TSN june 15, 2012 page 20, it is understood that if it is Lincoln type motor, it is an open type motor

-REGARDING DELIVERY OF METAL BOXES PAGE 8-11, 14-17

did not ask for the reason why defendant asked for metal boxes

Common Exhibit: Plaintiff's Exhibit D; Defendant's Exhibit 13

Common Exhibit: Plaintiff's Exhibit A; Defendant's Exhibit 1

Common Exhibit: Plaintiff's Exhibit B; Defendant's Exhibit 2

Exhibit C

Common Exhibits: Plaintiff's Exhibits D, D-2; Defendant's Exhibits 13, 14


Ibid

TSN dated 25 May 2012, page 15

TSN dated 25 May 2012, page 18

Common Exhibit: Plaintiff's Exhibit D-1 and Defendant's Exhibit 14

TSN dated June 15, 2012, page 20

TSN dated July 29, 2013, page 21

TSN dated June 15, 2012, Page 11


Exhibit C

Common Exhibit: Plaintiff's Exhibit A; Defendant's Exhibit 1



azajar vs. solid one

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