Tuesday, July 11, 2023

Case Digest: Packaging Products Corp. vs NLRC, G.R. No. 50383

Packaging Products Corp. vs NLRC, GR. No. 50383, July 23, 1987

Subject: Obligations and Contracts

FACTS

This is a petition for review on certiorari of the resolution issued by the respondent National Labor Relations Commission (NLRC) dismissing the petitioners' appeal and affirming the decision of the labor arbiter which ordered the petitioners to pay Briccio Eleria's unpaid commissions in the amount of Two Hundred Seventy Two Thousand, Eight Hundred Thirty Pesos and Eighty Centavos (P272,830.80) plus legal interests at six per cent (6%) per annum until fully paid.

Respondent Inocando maintains that the main reason why management took away from the complainant the La Tondena, Inc., account was that they learned that complainant did not actually pass on the commission rebates to the La Tondena employees and that they became more suspicious because of complainant's high style of living and expensive activities which suspicion was allegedly heightened when complainant refused respondent Inocando's offer that he (Inocando) accompany him in making the rebate payments.

ISSUE

Whether or not the private respondent is entitled to unpaid commissions based on the aggregate value of the actual monthly sales to La Tondena, Inc.

RULING

No, under the law, in pari delicto, neither one may expect positive relief from courts of justice in the interpretation of their contract. The courts will leave them as they were at the time the case was filed.

Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: (1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking; (2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of the contract, or ask for the fulfillment of what has been promised him. The other, who is not at fault, may demand the return of what he has given without any obligation to comply his promise.

Base on the facts it appearing that the subject matter of the agreement sought to be enforced is illegal and immoral. The Bureau of Internal Revenue is cheated of sizeable amounts of taxes. The corrupting influence affects the employees of the buyer corporation and the officials and employees of the supplier firms who are involved in the arrangements. And as always, it is the consuming public which ultimately suffers. 

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