Case Digest (G.R. No. 220613) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
Subic Bay Distribution, Inc. (SBDI), as obligee, and Prime Asia Sales and Services, Inc. (PASSI), as principal debtor, executed a Distributor Agreement on April 16, 2001 in Makati City, stipulating that PASSI would purchase petroleum products on a fifteen-day credit term not exceeding ₱5,000,000.00. Under Item 6.3, PASSI was required to secure its obligations by posting a performance bond issued by a reputable bonding company chosen by SBDI. In compliance, PASSI obtained an ₱8.5 million bond from Western Guaranty Corporation (WGC), the respondent. PASSI defaulted on its payments, prompting SBDI to send demand letters to PASSI on January 7 and February 11, 2002, and separate demands to WGC on January 15, February 12, and February 27, 2002, to call on the bond. WGC referred PASSI to explain nonpayment but received no protest regarding delivery. Consequently, SBDI filed Civil Case No. 02-1524 before the Regional Trial Court (RTC) of Makati City, Branch 136, seeking ₱8.5 million. WG Case Digest (G.R. No. 220613) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contractual Relationships and Agreements
- Subic Bay Distribution, Inc. (SBDI) and Prime Asia Sales and Services, Inc. (PASSI) entered into a Distributor Agreement on April 16, 2001, effective for two years and renewable annually. Under Item 6.3, PASSI was to secure a performance bond from a bonding company chosen by SBDI. Credit terms: payment within 15 days; credit limit of ₱5 million.
- PASSI obtained an ₱8.5 million performance bond from Western Guaranty Corporation (WGC) despite the ₱5 million credit‐limit clause.
- Default, Demand, and Litigation
- PASSI failed to pay for petroleum deliveries totaling ₱100,256,601.17. SBDI sent demand letters to PASSI (Jan. 7, 2002; Feb. 11, 2002) and to WGC (Jan. 15; Feb. 12; Feb. 27, 2002) for ₱8.5 million under the surety bond. No payment or protest ensued.
- SBDI sued WGC for sum of money (Civil Case No. 02-1524, RTC Makati, Branch 136). WGC counterclaimed alleging collusion and material alteration of the Distributor Agreement without its consent.
Issues:
- Whether the Court of Appeals erred in holding that:
- SBDI failed to prove actual delivery of petroleum products to PASSI; and
- Material alterations to the Distributor Agreement released WGC from liability.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)