Case Digest (G.R. No. L-49395)
Facts:
In a letter agreement dated November 3, 1969, E.R. Squibb & Sons Philippine Corporation appointed Green Valley Poultry & Allied Products, Inc. as a non-exclusive distributor of veterinary products in Central and Northern Luzon, including Cagayan Valley. The contract provided for specific discounts off catalog and wholesale prices, exceptions for certain items, the posting of a ₱20,000 bond, delivery of turnover orders, strict territorial limits, and payment within sixty days from invoice without post-dated checks. Squibb delivered merchandise valued at ₱48,374.74 (plus ₱96.00 for packing) but Green Valley failed to remit payment after the credit period elapsed. Squibb sued in the Regional Trial Court, which rendered judgment ordering Green Valley to pay the principal sum with 6% annual interest from the filing date, ₱5,000 attorney’s fees, and costs. The defunct Court of Appeals affirmed that judgment. Green Valley then filedCase Digest (G.R. No. L-49395)
Facts:
- Contract Formation and Principal Terms
- On November 3, 1969, E.R. Squibb & Sons Philippine Corporation (“Squibb”) and Green Valley Poultry & Allied Products, Inc. (“Green Valley”) executed a letter agreement appointing Green Valley as a non-exclusive distributor of Squibb Veterinary Products.
- The agreement provided:
- A three-tier discount structure—10% off catalogue price (feed-store), 10% off wholesale, and distributor price;
- Exceptions for certain products (e.g., Afsillin Improved 40-lb bag at 8% off P120.00; narrow-spectrum injectable antibiotics invoiced at net price; “deals and special offers” entitling distributor to 5% commission when documentation is furnished);
- Prices subject to change without notice, with orders charged at the price in effect upon receipt;
- Exclusive territory covering Central Luzon and Northern Luzon (including Cagayan Valley), with a prohibition on transfer of stocks outside this area;
- Obligation to put up a P20,000.00 bond;
- Payment due 60 days from invoice date (no post-dated checks permitted);
- Thirty-day termination notice by either party.
- Performance, Default, and Lower Court Decisions
- Squibb delivered veterinary products to Green Valley; Green Valley failed to pay for goods within the 60-day credit period.
- Squibb filed suit for P48,374.74 for unpaid deliveries, plus P96.00, 6% interest per annum from filing, P5,000 attorney’s fees, and costs.
- The trial court rendered judgment in favor of Squibb for the amounts claimed; the then-Court of Appeals affirmed this decision. Green Valley petitioned for review to the Supreme Court.
Issues:
- Nature of the Contract
- Whether the November 3, 1969 agreement is a contract of sale or an agency/consignment arrangement.
- Liabilities Arising from the Contract
- Whether Green Valley is liable to pay for delivered goods—especially those sold on credit—regardless of the contract’s characterization.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)