G.R. No. 125778 - Inter-Asia Investments Industries Inc. vs. Court of Appeals

SEA Commercial Company, Inc. (SEACOM), a corporation engaged in selling and distributing agricultural machinery, products and equipment.
Jamandre Industries, Inc. (JII), appointed dealer by SEACOM; Tirso Jamandre, president of JII, executed a suretyship agreement binding himself jointly and severally with JII.
Dealership agreement dated September 20, 1966 (Exh. "A"); suretyship (Exh. "B"); subsequent amendment extending territorial coverage to Capiz and converting dealership to non‑exclusive (Exh. "D").

JII allegedly incurred an unpaid balance of P18,843.85 for deliveries; SEACOM sued to recover the amount with interest and attorney's fees.
JII denied liability and counterclaimed for damages for unrealized profits, alleging SEACOM, after learning of JII's negotiations with Farm System Development Corporation (FSDC), directly sold twenty‑one (21) units of Mitsubishi power tillers to FSDC, thereby depriving JII of unrealized profit of P85,415.61.

JII asserted it conducted demonstrations and promotions for sale of twenty‑four (24) units to FSDC in 1977; JII informed SEACOM of FSDC's preference and requested a 50% discount and extended warranty.
SEACOM's sales manager refused the 50% discount but offered "less 30% less 10% up to end March" and extended the warranty; SEACOM acknowledged JII's pending units with FSDC (documentary evidence Exhs. "6", "7").
Both SEACOM and JII participated in the FSDC bidding (Exh. "N"); SEACOM was awarded the contract directly from Manila.
Price comparisons: JII offered FSDC P27,167 per unit (Exh. "8"); SEACOM sold to FSDC at P22,867.00 (Model CT 83‑2), P21,093.50 (Model CT 83‑E), and P18,979.25 (Model CT 534).

Trial court, Civil Case No. 122391, rendered judgment January 24, 1990: ordered JII to pay SEACOM P18,843.85 for outstanding obligation; granted JII's counterclaim awarding unrealized profits and damages (moral/exemplary damages P2,000.00, attorney's fees P10,000.00) in favor of defendants.
SEACOM appealed the counterclaim decision to the Court of Appeals (CA‑G.R. CV NO. 31263); the Court of Appeals affirmed the trial court in toto but found no agency relationship between SEACOM and JII while nevertheless holding SEACOM liable under Article 19 of the Civil Code for bad faith competition.
SEACOM filed a petition for review on certiorari to the Supreme Court, assigning four errors and...(Subscriber-Only)

Whether the Supreme Court may review the Court of Appeals decision given the presence of mixed questions of fact and law.

Whether an agency relationship existed between SEACOM and JII.
Whether SEACOM acted in bad faith and abused its rights by competing with its dealer and thereby became liable for JII's unrealized profits.
Whether the non‑exclusivity clause in the dealership agreement permitted SEACOM to compete with JII without liability.
Whether JII is entitled to recover unrealized profits f...(Subscriber-Only)