Joe’s Radio vs Alto (GR No. L-12376 August 22, 1958)

Joe’s Radio and Electrical Supply vs Alto Electronics Corporation
GR No. L-12376 August 22, 1958

Facts: On May 23, 1953, the plaintiff and appellee and the Bolinao Electronics Corporation entered into a “dealership agreement”, (Exhibit “A”), whereby the latter bound itself to sell and deliver to the former 500 television sets (RCA TV Model 21T-303, 21″ KERBY) at the price of P1,134.00 each, in two shipments of 250 sets, the first shipment to be made within 90 days from May 23, 1953, and the next shipment within 60 days after the completion of the first shipment. On its part, the appellee, Joe’s Radio & Electrical Supply, agreed to deposit 1/3 of the total price of the first shipment, minus a discount of 30 per cent, upon signing the contract; 1/3 of the total price of the second shipment, minus a discount of 30 per cent, immediately after its receipt of the first shipment; and the balance of the total price of each shipment (minus the discounts) immediately after making the performance test of each set in each shipment. To secure the true and faithful compliance of the agreement by the Bolinao Electronics Corporation, it agreed to put up a surety bond, in an amount sufficient to cover the advance payment to be made by appellee, and also that, should the Bolinao Electronics Corporation fail to comply with the terms of the agreement within the period specified, it would return to appellee upon demand whatever amount or amounts had been deposited by the latter, with interest at the rate of 6% per annum, plus damages equivalent to 20 per cent of the total cost of 250 television sets. The defendant and appellant Alto Electronics Corporation was subrogated to the rights and obligations of the Bolinao Electronics Corporation in the “dealership agreement” on August 31, 1953; and on the same date, the other defendantappellant Alto Surety & Insurance Co., Inc., issued in favor of appellee a surety bond in the amount of P66,150 to guarantee the full and faithful performance by the appellant Alto Electronics Corporation under the agreement. The first shipment of 250 television sets was totally delivered, and totally paid for. Thereafter, appellee deposited with appellant Alto Electronics Corporation the sum of P66,150, the sum required under the “dealership agreement” as advance partial payment for the 250 sets of the second delivery. No delivery having been made on this second batch, suit was commenced against the defendants and appellants on January 30, 1954. During the pendency of the case, but before trial was held, the appellee and the Alto Electronics Corporation entered into another agreement, dated July 2, 1954, wherein the latter admitted having received from the former the sum of P66,150, as advance partial payment. Under the terms of the second instrument, the said appellant agreed to liquidate this indebtedness by delivering to appellee 66 television sets of various models, delivery to commence within five days after the signing of the agreement and to be completed within 90 days thereafter. With this agreement, the Alto Surety & Insurance Co., Inc. signed in conformity. However, only 13 were delivered leaving an unpaid balance of P49,378.77. Besides these 13 television sets, said appellant also delivered to appellee two other sets with a total value of P2,928.24, which were accepted by the latter as “deposit pending receipt of letter of approval from the appellant surety company” presumably (fearing a release of the surety bond should said delivery be accepted without the surety company’s consent), because delivery was made after the lapse of the period provided in the second agreement.
 
Issue: Whether or not the failure to object by the defendant with the statement on the balance yet left is conclusive as not to imply extinguishment of the obligation.
 
Held: Yes. Certainly, the delivery of the two television sets in question could not have been intended by either of the parties to be the full and final settlement of appellee’s claim.
 
Upon the other hand, it would seem that the general principles on payment under the Civil Code sanctions such kind of acceptance, as where the performance of the obligation is incomplete or irregular. Observe that the delivery of the two television sets was made after the prescribed period fixed in the agreement of the parties. Lest the appellee be misunderstood as having granted an extension of the obligation that might release the surety company from its undertaking under the surety bond, it was not improper nor unreasonable for it to subject its acceptance to the said delivery upon the surety company’s consent. It should be noted further that when appellee imposed such condition, no objection was interposed by the appellant Alto Electronics Corporation, thereby at least implying its concurrence to it.
 
As regards the appellant Alto Electronics Corporation, there is another reason why the first assigned error could not be given merit, and that is, its admission under paragraph 5 of its amended answer of paragraph 11 of the amended and supplemental complaint which in effect admitted the allegations contained in the said paragraph of the complaint, “That under the aforesaid agreement, defendant delivered to plaintiff only 13 television sets with a total value of P20,629.98 leaving an unpaid balance of P49,378.77”. It is a familiar doctrine that an admission made in the pleadings cannot be controverted by the party making such admission and are conclusive as to him, and that all proofs submitted by him contrary thereto or inconsistent therewith, should be ignored, whether objection is interposed by the party or not.

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