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CMS LOGGING v. CA

FACTS:

The petitioner, CMS Logging, Inc., and the private respondent, D.R. Aguinaldo Corporation (DRACOR), entered into a contract of agency where DRACOR was appointed as the exclusive export and sales agent for CMS's logs for a period of five years. Under the agreement, DRACOR was entitled to a 5% commission of the gross sales. However, CMS discovered that DRACOR had used Shinko Trading Co., Ltd. (Shinko) as an agent and paid them a commission of U.S. $1.00 per 1,000 board feet of logs sold, while CMS was on a trip to Japan. CMS claimed that this commission paid to Shinko violated the agreement and demanded to be entitled to the amount. CMS then directly sold and shipped logs valued at U.S. $739,321.13 to firms in Japan without DRACOR's intervention.

CMS filed a complaint against DRACOR, seeking the commission received by Shinko and damages. On the other hand, DRACOR counterclaimed for its commission from the sales made by CMS. The trial court dismissed both the complaint and counterclaims, stating that there was no evidence to show that Shinko received the commission and that DRACOR had waived its rights to the balance of its commission. The Court of Appeals affirmed the dismissal, concluding that CMS failed to prove its claims and that Shinko was likely paid by DRACOR out of its own commission. CMS then appealed to the Supreme Court.

ISSUES:

  1. Whether CMS is entitled to recover the commission paid to Shinko.

  2. Whether DRACOR is entitled to its commission from the sales made by CMS.

RULING:

  1. The Court of Appeals affirmed the trial court's dismissal of CMS's complaint because CMS failed to prove by competent evidence its claim that Shinko collected commissions from the buyers of CMS's logs in Japan. The Court of Appeals held that there was no categorical finding that Shinko received the commission and therefore CMS is not entitled to recover the amount.

  2. The Court of Appeals did not explicitly rule on DRACOR's entitlement to its commission from the sales made by CMS. However, it mentioned that there is reason to believe that Shinko was paid by DRACOR out of its own commission of 5%. This suggests that DRACOR may still be entitled to its commission.

PRINCIPLES:

  • The plaintiff has the burden of proving its claim by preponderance of evidence. (CMS failed to prove its claim that Shinko received the commission)

  • An admission made by a party's agent or representative is admissible against that party. (CMS argued that the admission by Shinko's president and director that it collected a commission is admissible against DRACOR)

  • Silence may imply an admission under certain circumstances. (CMS argued that DRACOR's silence regarding the commission collected by Shinko is deemed an admission)