FACTS: Respondent Contractors Equipment Corporation (CEC) leased various construction equipment to petitioner Roblett Industrial Construction Corporation (RICC), which incurred unpaid accounts amounting to P342,909.38. RICC, through its Assistant VP for Finance, Aller Jr., entered into an Agreement with CEC, confirming the unpaid account. As part of the Agreement, CEC received construction materials worth P115,000.00 from RICC, reducing the balance to P227,909.38.
RICC paid CEC P10,000.00 in postdated checks, which were dishonored upon deposit. CEC debited the dishonored amount to RICC’s account, increasing the balance to P237,909.38. The General Manager of CEC, sent a demand letter to RICC for the overdue account of P237,909.38, requesting settlement. However, RICC requested a 30-day extension to source funds for settlement.
Under the same Agreement, petitioner claims full payment of the obligation alleging overpayment and failure of the respondent to offset the P115,000.00. Petitioner further posits that the other terms and conditions of the agreement are onerous, illegal and wanting of prior consent and Board’s approval.
RICC’s Assistant VP for Finance Aller Jr. claimed that he signed the Agreement to have proof of payment, but the RICC Board disapproved the Agreement. RICC’s Vice President for Finance, reiterated overpayment to CEC based on Equipment Daily Time Reports. However, CEC presented a statement of account (P376,350.18 minus deductions = P342,909.38), but RICC never questioned the same. Hence, an action for a sum of money by CEC against RICC.
The RTC ordered petitioner RICC to pay respondent CEC. RICC’s admission as to the existence of the Agreement, under the principle of estoppel, is rendered conclusive upon defendant and cannot be denied or disproved as against plaintiff.
The CA affirmed the RTC.
ISSUE: Whether petitioner RICC is estopped from denying the existence of the Agreement it entered into with respondent CEC.
RULING: Yes. Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts.
In the present case, petitioner never raised a protest when presented with statement of account by CEC. Neither did petitioner controvert the demand letter concerning the overdue account. Instead, it asked for ample time to source funds to substantially settle the account.
Hence, estoppel is present. RICC cannot deny the existence of the Agreement it entered into with respondent CEC.
