Case Digest (G.R. No. 184819) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In G.R. No. 225438, decided on January 20, 2021 under the 1987 Constitution, petitioners Voltaire Hans N. Bongcayao, doing business as VHB Biopro Enterprises, and his attorney‐in‐fact Pete Nicomedes Prado entered into a Sales and Purchase Agreement with respondent Confederation of Sugar Producers Cooperatives (CONFED), represented by Jose J. Jison, on December 11, 2007. The agreement required VHB Biopro to supply 250,000 bags of urea fertilizer at Bredco Port, Bacolod City, and to procure a Performance Bond for ₱5,000,000.00 through Prudential Guarantee and Assurance, Inc. (PGAI), secured by a real estate mortgage. CONFED opened an irrevocable domestic letter of credit for ₱177,500,000.00 on January 14, 2008, but VHB Biopro failed to deliver. CONFED demanded payment under the Performance Bond, which PGAI promptly paid on April 2, 2008. VHB Biopro and Prado filed a complaint on March 17, 2008 in the Makati RTC to annul the agreement for alleged ambiguity and to enjoin PGAI from f Case Digest (G.R. No. 184819) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contract Formation
- On October 16, 2007, CONFED, through its COO Jose J. Jison, solicited VHB Biopro’s services by Letter of Intent; on October 29, 2007, Pete N. Prado, attorney-in-fact for VHB Biopro, confirmed willingness to supply urea fertilizer.
- On December 11, 2007, VHB Biopro and CONFED executed a Sales and Purchase Agreement: VHB Biopro to deliver 250,000 bags of urea agricultural grade fertilizer ex-pier at Bredco Port, Bacolod City, after CONFED’s opening of a domestic letter of credit; VHB Biopro to procure a P5,000,000 performance bond from Prudential Guarantee and Assurance, Inc. (PGAI).
- Procurement of Bond and Letter of Credit
- On December 26, 2007, VHB Biopro (through Prado) secured a P5,000,000 performance bond from PGAI, secured by a real estate mortgage.
- On January 14, 2008, CONFED opened Irrevocable Transferable Documentary Credit No. BCD2008-01D for P177,500,000.00 in favor of VHB Biopro; VHB Biopro did not deliver the fertilizers.
- Bond Claim and Lower Court Proceedings
- CONFED demanded payment under the bond; PGAI paid P5,000,000 on April 2, 2008, evidenced by release and quitclaim.
- On March 17, 2008, VHB Biopro and Prado filed a complaint with application for TRO/preliminary injunction to nullify the SPA (alleging ambiguity over acceptance and payment terms) and to enjoin PGAI from enforcing the bond; CONFED denied ambiguity and counterclaimed P30,000,000 actual damages, temperate damages P5,000,000, moral damages P2,000,000, and attorney’s fees P1,000,000; PGAI counterclaimed for P1,000,000 compensatory damages, P500,000 exemplary damages, P100,000 attorney’s fees, and P5,000 per appearance.
- RTC and CA Decisions
- The RTC issued a TRO on April 10, 2008 (dissolved August 1, 2012) and, on March 11, 2014, ruled in favor of VHB Biopro and Prado, ordering CONFED to return P5,000,000 to PGAI and PGAI to return the mortgaged property to Prado; all counterclaims were dismissed.
- On January 19, 2016, the Court of Appeals reversed and set aside the RTC decision, dismissed the complaint for lack of merit, dismissed PGAI’s counterclaims, granted CONFED P30,000,000 compensatory damages for lost profits, and denied moral damages and attorney’s fees.
Issues:
- Did the Court of Appeals err in reversing the RTC decision?
- Assuming VHB Biopro was in default, did the CA err in awarding compensatory damages to CONFED?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)