Magat, Jr. v. CA
GR 124221
Facts:
Private
respondent Santiago A. Guerrero (hereinafter referred to as
"Guerrero") was President and Chairman of[4]“Guerrero Transport Services", a single proprietorship.
Sometime in
1972, Guerrero Transport Services won a bid for the operation of a fleet of
taxicabs within the Subic Naval Base, in Olongapo. As highest bidder, Guerrero
was to "provide radio-controlled taxi service within the U. S. Naval Base,
Subic Bay, utilizing as demand requires... 160 operational taxis consisting of
four wheel, four-door, four passenger, radio controlled, meter controlled,
sedans, not more than one year..."
With the advent
of martial law, President Ferdinand E. Marcos issued Letter of Instruction No.
1 (hereinafter referred to as "the LOI"): SEIZURE AND CONTROL
OF ALL PRIVATELY OWNED NEWSPAPERS, MAGAZINES, RADIO AND TELEVISION FACILITIES
AND ALL OTHERMEDIA OF COMMUNICATION, ordering to take over and control or cause
the taking over and control of all such newspapers, magazines, radio and
television facilities and all other media of communications, wherever they are,
for the duration of the present national emergency, or until otherwise ordered
by me or by my duly designated representative.
Pursuant to the
LOI, Radio Control Office issued Administrative Circular No.4: SUSPENDING THE
ACCEPTANCE AND PROCESSING OF APPLICATIONS FOR RADIO STATION CONSTRUCTION
PERMITS AND FOR PERMITS TO OWN AND/OR POSSESS RADIO TRANSMITTERS OR
TRANSCEIVERS, suspending the acceptance and processing by the radio control
office of applications for radio stations constructions permits and for permits
to possess, own, transfer, purchase and sale of radio transmitters and
transreceivers as well as manufacturers and dealer’s permits of said equipment.
Guerrero and petitioner
Victorino D. Magat (hereinafter referred to as Victorino), as General Manager
of Spectrum Electronic Laboratories, a single proprietorship, executed a
letter-contract for the purchase of transceivers. Victorino was to
deliver the transceivers within 60 to 90 days after receiving notice from
Guerrero of the assigned radio frequency, "taking
note of Government Regulations."Victorino contacted his Japanese
supplier and ordered for the transceivers.
The Navy
Exchange Officer confirmed that Guerrero won the bid for the commercial
transportation contract. Middle man and broker Aligada advised Victorino Magat "proceed
with the order upon receipt of letter of credit.
Guerrero
applied for a letter of credit with the Metropolitan Bank and Trust Company.[15] This application was not pursued.
Victorino,
represented by his lawyer, Atty. Sinesio S. Vergara, informed Guererro that the
order with the Japanese supplier has not been canceled. Should the contract be
canceled, the Japanese firm would forfeit 30% of the deposit and charge a
cancellation fee in an amount not yet known, Guerrero to bear the loss.
Further, should the contract be canceled, Victorino would demand an additional
amount equivalent to 10% of the contract price.
Unable to get a
letter of credit from the Central Bank due to the refusal of the Philippine
government[18] to issue a permit to import the transceivers,[19] Guerrero commenced operation of the taxi cabs within Subic Naval Base,
using radio units borrowed from the U.S. government (through the Subic Naval
Base authorities).[20] Victorino thus
canceled his order with his Japanese supplier. Victorino Magat filed with RTC a complaint for damages arising from
breach of contract against Guerrero.
ISSUE/ Ruling:
1. Whether the contract between Victorino and Guerrero for the purchase of
radio transceivers was void.
The
contract was valid; the radio transceivers were not contraband.
"Contraband"
generally refers to "any property which is unlawful to produce or
possess." It refers to goods which are exported and imported into a
country against its laws.
Therefore,
possession and importation of the radio transmitters and transceivers was legal
provided one had the necessary license for it.[42] Transceivers were not
prohibited but merely regulated goods. The LOI and Administrative Circular did
not render the transceivers outside the commerce of man. They were valid
objects of the contract.[43]
2. Whether the contract was
breached.
The law provides that "[w]hen
the service (required by the contract) has become so manifestly beyond the
contemplation of the parties, the obligor may also be released therefrom, in
whole or in part."[46] Here, Guerrero's inability
to secure a letter of credit and to comply with his obligation was a direct
consequence of the denial of the permit to import. For this, Guerrero cannot be faulted.
Even if we assume that
there was a breach of contract, damages cannot be awarded. Damnum absque
injuria. There was no bad faith. No moral damages and no exemplary damages. either
can actual damages be awarded. True, indemnification for damages contemplates
not only actual loss suffered(damnum emergens) but unrealized profits (lucrum cessans) as well.[53] However, to be entitled to
adequate compensation for pecuniary loss, the loss must be actually suffered
and duly proved.[54] To recover actual damages,
the amount of loss must not only be capable of proof, but must be proven with a
reasonable degree of certainty. The
claim must be premised upon competent proof or upon the best evidence
obtainable,[55] such as receipts[56] or other documentary proof.
There was none.
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