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INTEGRATED PACKAGING CORP. v. CA

FACTS:

The petitioner and private respondent entered into an order agreement for the delivery of 3,450 reams of printing paper. However, the balance of the delivery was not made on time, causing difficulties for the petitioner in fulfilling its contract with Philippine Appliance Corporation (Philacor) for the printing of three volumes of books. The private respondent filed a collection suit against the petitioner for the unpaid purchase price of the printing paper. The trial court ruled in favor of the private respondent, awarding them an amount of P763,101.70. On appeal, the Court of Appeals reversed the judgment, ordering the petitioner to pay the same amount with legal interest but deleting the award of compensatory damages, moral damages, and attorney's fees.

ISSUES:

  1. Whether petitioner should be held liable to pay private respondent the sum of P763,101.70, representing the value of the printing paper delivered.

  2. Whether petitioner should be awarded compensatory damages, moral damages, and attorney's fees.

RULING:

  1. Yes, petitioner should be held liable to pay private respondent the sum of P763,101.70. The Court of Appeals correctly ruled that petitioner failed to settle its outstanding obligation despite partial payments, thus, reducing petitioner's indebtedness.

  2. No, the Court of Appeals correctly deleted the award for compensatory damages, moral damages, and attorney's fees due to lack of factual and legal basis.

PRINCIPLES:

  • Parties to a contract must fulfill their obligations in good faith. Failure to do so may result in liability for damages. (Implied from the ruling that petitioner should pay private respondent the outstanding amount for the printing paper delivered)

  • In order to award compensatory damages, there must be a showing of the actual amount of loss or injury suffered by the aggrieved party. (Implied from the ruling that the award for compensatory damages was deleted due to lack of factual and legal basis)

  • Moral damages may be awarded in cases where the breach of contract results in physical suffering, mental anguish, or grave anxiety to the aggrieved party. (Implied from the ruling that the award for moral damages was deleted due to lack of factual and legal basis)

  • Attorney's fees may be awarded when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his rights. (Implied from the ruling that the award for attorney's fees was deleted due to lack of factual and legal basis)