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Republic of the Philippines represented by the Department of Agriculture vs.
Alberto
Looyuko, doing business under the name and style of Noah's Ark Sugar Holdings and
Wilson T. Go
G.R. No. 170966
June 22, 2016
Topic Under: Compensation (under extinguishment of obligation)
Facts: Due to the sugar crisis in 1985, President Ramos authorized the emergency importation of
100,000 metric tons of raw sugar from Thailand and Guatemala. National Sugar Refineries
Corporation (Nasurefco) was tasked by the government through Department of Agriculture to
handle the importation. Noah’s Ark Holding, along with two other refineries, were given
allocations to process and refine raw sugar. Nasurefco contracted the services of Maubeni to
source the raw sugar and deliver it to said refineries with the stipulation that in case of non-
delivery, short-delivery or loss of raw sugar, the latter would be liable therefor. Noah’s Ark,
represented by Wilson Go, executed a Refining Contract with Nasurefco. The delivery of Noah’s
Ark’s allocation of raw sugar was never completed. Petitioner adduced evidence to the effect that
there was a discrepancy between the registered weight at the port at the weighing scale at Noah’s
Ark prompting Marubeni to suspend delivery. Nasurefco notified Noah’s Ark to recalibrate its
weighing scale, which was done on December 1995. The recalibration was questioned by Noah’s
Ark. Marubeni resumed delivery on January 1996 but respondents refused to accept the raw
sugar. Petitioner demands delivery of the refined sugar withheld by respondents or payment of
the peso value thereof plus damages. Respondents, on the other hand, take exception to any
blame for the delay in the calibration of the weighing scale. They contend that it only took one
day to recalibrate the same and petitioner had no justification to delay the delivery of the raw
sugar. Respondents refused the delivery because of the inferior quality of the raw sugar due to
the undue delay in delivery. Respondent demanded payment for damages
Issue: Whether or not petitioner and respondents are entitled to actual or compensatory
damages?
Held: Petitioner obviously incurred delay in the performance of its obligation under the Refining
Contract when it failed to complete its delivery of raw sugar to respondents in time for the
scheduled withdrawal by petitioner of the refined sugar. It must be emphasized that it was
petitioner who gave respondents a timetable within which the processed sugar was to be
withdrawn, which was to start around the first week of December 1995. Evidently, petitioner
should have completed its delivery of raw sugar to respondents before this date. The records of
this case clearly show, however, that the delivery of raw sugar to respondents ended on February
14, 1996 without petitioner having delivered the entire sugar allocations due respondents under
the Refining Contract.
Both parties failed to present any persuasive proof that they are entitled to actual or
compensatory damages. Their claims remain unsubstantiated and unproven. It is a
fundamental
principle of the law on damages that, while one injured by a breach of contract shall be
awarded
fair and just compensation commensurate with the loss sustained as a consequence of
the
defendant’s acts or omission, a party is entitled only to such compensation for the pecuniary
loss
that he has duly proven. Actual damages cannot be presumed and cannot be based on
flimsy, remote, speculative and non-substantial proof. Neither petitioner nor respondent is
thus entitled to actual or compensatory damages in this case. It is significant to note that the
Refining Contract between petitioner and respondent did not state the amount of the contract
which may be a basis for an award of actual damages.
Considering the incomes to have been lost in the case at bar (80,000,000 pesos for petitioner
and 52,000,000 for respondents), the Court deems the amount of 4,000,000 as temperate
damages for each party reasonable under the circumstance. Article 1283 of the Civil Code
provides that if one of the parties to a suit over an obligation has a claim for damages against
the other, the former may set it off by proving his right to said damages and the amount
thereof.

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Republic of the Philippines represented by the Department of Agriculture vs.

Topic Under: Compensation (under extinguishment of obligation)

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