Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 193577 September 7, 2011 ANTONIO FRANCISCO, substituted by his heirs: NELIA E.S. FRANCISCO, EMILIA F. BERTIZ, REBECCA E.S. FRANCISCO, ANTONIO E.S. FRANCISCO, JR., SOCORRO F. FONTANILLA, and JOVITO E.S. FRANCISCO, Petitioners, vs. CHEMICAL BULK CARRIERS, INCORPORATED, Respondent. D E C I S I O N CARPIO, J.: The Case This is a petition for review 1 of the 31 May 2010 Decision 2 and 31 August 2010 Resolution 3 of the Court of Appeals in CA G.R. CV No. 63591. In its 31 May 2010 Decision, the Court of Appeals set aside the 21 August 1998 Decision 4 of the Regional Trial of Pasig City, Branch 71 (trial court), and ordered petitioner Antonio Francisco (Francisco) to pay respondent Chemical Bulk Carriers, Incorporated (CBCI) ₱1,119,905 as actual damages. In its 31 August 2010 Resolution, the Court of Appeals denied Francisco’s motion for reconsideration. The Facts Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal. Sometime in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to Francisco’s Caltex station and introduced themselves as employees of CBCI. Bacsa offered to sell to Francisco a certain quantity of CBCI’s diesel fuel. After checking Bacsa’s identification card, Francisco agreed to purchase CBCI’s diesel fuel. Francisco imposed the following conditions for the purchase: (1) that Petron Corporation (Petron) should deliver the diesel fuel to Francisco at his business address which should be properly indicated in Petron’s invoice; (2) that the delivery tank is sealed; and (3) that Bacsa should issue a separate receipt to Francisco. The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January 1994. 5 There were 17 deliveries to Francisco and all his conditions were complied with. In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel delivered to him but which had been paid for by CBCI. 6 CBCI demanded that Francisco pay CBCI ₱1,053,527 for the diesel fuel or CBCI would file a complaint against him in court. Francisco rejected CBCI’s demand. On 16 April 1996, CBCI filed a complaint for sum of money and damages against Francisco and other unnamed defendants. 7 According to CBCI, Petron, on various dates, sold diesel fuel to CBCI but these were delivered to and received by Francisco. Francisco then sold the diesel fuel to third persons from whom he received payment. CBCI alleged that Francisco acquired possession of the diesel fuel without authority from CBCI and deprived CBCI of the use of the diesel fuel it had paid for. CBCI demanded payment from Francisco but he refused to pay. CBCI argued that Francisco should have known that since only Petron, Shell and Caltex are authorized to sell and distribute petroleum products in the Philippines, the diesel fuel came from illegitimate, if not illegal or criminal, acts. CBCI asserted that Francisco violated Articles 19, 8