Case Digest (G.R. No. 203566) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Total Petroleum Philippines Corporation v. Edgardo Lim and Tyreplus Industrial Sales, Inc. (G.R. No. 203566, June 23, 2020), respondents Edgardo Lim and Tyreplus, a Davao-based distributor of automotive products, entered into a twelve-month non-exclusive, non-transferable Commercial Distributorship Agreement with petitioner Total on December 1, 1999. Under Articles 2 and 9 of the Agreement, Tyreplus could not assign its rights or obligations without Total’s written consent. Shortly thereafter, Lim purportedly changed Tyreplus’s corporate name to Superpro Industrial Sales Corporation, obtained Superpro’s Articles of Incorporation (SEC-registered February 8, 2000), and executed a separate Distributorship Agreement with Total under Superpro’s letterhead. Total discovered that Superpro was a distinct entity and pre-terminated both agreements on March 9, 2000, demanding payment of P472,926.30. Tyreplus then filed a damage suit in the Regional Trial Court (Branch 10, Davao City) al Case Digest (G.R. No. 203566) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background and Agreement
- On December 1, 1999, Tyreplus Industrial Sales, Inc. (“Tyreplus”) and Total Petroleum Philippines Corporation (“Total”) executed a 12-month Commercial Distributorship Agreement.
- The Agreement (a) granted Tyreplus a non-exclusive, non-transferable distributorship (Art. 2); (b) imposed marketing, reporting, purchase minimums and exclusivity obligations (Art. 4); and (c) prohibited assignment without Total’s written consent (Art. 9).
- Name change and assignment of obligations
- Between January and February 2000, Tyreplus’ President Edgardo Lim represented to Total that Tyreplus had dissolved and changed its corporate name to Superpro Industrial Sales Corporation (“Superpro”), and a new distributorship agreement was signed with Superpro on February 10, 2000.
- PSBank issued a P500,000 guaranty “to answer for the obligations of Superpro and its predecessor Tyreplus”; Lim assured Total that Superpro would guarantee Tyreplus’ billings; subsequently, Lim stopped payment on issued checks.
- Termination and litigation
- On March 9, 2000, Total pre-terminated both distributorship agreements and demanded P472,926.30 for unpaid deliveries; Lim then filed suit for damages against Total.
- The Regional Trial Court (November 15, 2005) upheld the termination, awarded P472,926.30 plus P401,308.00 (actual damages), P25,000.00 (liquidated), P94,585.26 (attorney’s fees), and P5,000.00 per hearing.
- The Court of Appeals (February 29, 2012) reversed, holding Tyreplus still existed, estopping Total, awarding respondents P400,000.00 (actual), P150,000.00 (moral), P50,000.00 (exemplary), P178,000.00 (attorney’s fees), and ordering P472,962.30 to Total; its motion for reconsideration was denied.
Issues:
- Validity of Total’s pre-termination of its Distributorship Agreement with Tyreplus
- Did Tyreplus breach the non-assignability clause by transferring its rights and obligations to Superpro without Total’s consent?
- Was Total estopped from pre-terminating its agreement by its own conduct and reliance on Lim’s representations?
- Personal liability of Edgardo Lim
- Should Lim be held personally liable for Tyreplus’ obligations under the alter-ego or piercing-veil doctrine?
- Were the requisites for officer liability—assent to unlawful acts, bad faith or gross negligence—satisfied?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)