G.R. No. 168756 and G.R. NO. 171476 - Shrimp Specialist, Inc., v. Fuji-Triumph Agri-Industrial Corporation
[G.R. NO. 168756 : December 7, 2009]
SHRIMP SPECIALISTS, INC., Petitioner, v. FUJI-TRIUMPH AGRI-INDUSTRIAL CORPORATION, Respondent.
[G.R. NO. 171476 : December 7, 2009]
FUJI-TRIUMPH AGRI-INDUSTRIAL CORPORATION, Petitioner, v. SHRIMP SPECIALISTS, INC. and EUGENE LIM, Respondents.
D E C I S I O N
This is a consolidation of two separate petitions. In G.R. No. 168756, Shrimp Specialists, Inc. (Shrimp Specialists) filed a Petition for Review on Certiorari1 assailing the Court of Appeals' Decision2 dated 28 June 2005 in CA-G.R. CV No. 57420. In the assailed decision, the Court of Appeals (CA) ordered Shrimps Specialists to pay Fuji-Triumph Agri-Industrial Corporation (Fuji) the following:
1. the sum of
P767,427.00 representing the principal amount for the deliveries made by plaintiff from June to July 1989 inclusive plus six percent (6%) thereon per annum computed from extrajudicial demand, February 2, 1990, until the finality of the judgment plus twelve percent (12%) interest thereon per annum, computed from the finality of this judgment until the amount is fully paid;
the sum of
P30,000.00 as reasonable attorney's fees; andcralawlibrary
the cost of this suit.3
The CA modified the Regional Trial Court's Decision4 dated 15 April 1997 by dismissing the case against Eugene Lim, President of Shrimp Specialists.
In G.R. No. 171476, Fuji filed a Petition for Review on Certiorari5 assailing the CA Resolution dated 26 January 2006 in CA-G.R. CV No. 57420, denying Fuji's Motion for Reconsideration of the CA Decision dated 28 June 2005.
Shrimp Specialists and Fuji entered into a Distributorship Agreement, under which Fuji agreed to supply prawn feeds on credit basis to Shrimp Specialists. The prawn feeds would be used in prawn farms under Shrimp Specialists' technical supervision and management. In 1987, Shrimp Specialists began purchasing prawn feeds from Fuji and paid for them in the regular course of business.6
From 3 June 1989 to 24 July 1989, Fuji delivered prawn feeds, and Shrimp Specialists issued 9 postdated checks as payment.7
Shrimp Specialists alleges that it issued a stop-payment order for the checks because it discovered that earlier deliveries were contaminated with aflatoxin. Shrimp Specialists claims that it verbally informed Fuji about the contamination and Fuji promised to send stocks of better quality. Shrimp Specialists states that it continued to purchase prawn feeds from Fuji, but the stocks were still contaminated with aflatoxin.8
Fuji denies that the feeds were contaminated. Fuji asserts that Shrimp Specialists requested to put on hold the deposit of the checks due to insufficient funds. Fuji adds that when the checks were presented for payment, the drawee bank dishonored all the checks due to a stop-payment order.9
In January 1990, Ervin Lim, Fuji's Vice-President and owner, and Edward Lim, Shrimp Specialists' Finance Officer, met in Ozamiz City to discuss the unpaid deliveries. After the meeting, both agreed that Shrimp Specialists would issue another set of checks to cover the ones issued earlier. This agreement was reduced into writing and signed by both parties on behalf of their corporations.10 The agreement reads:
Received from SSI the ff. checks representing full payment of the previous stopped (sic) payment checks to Fuji as follows:
|Ck # 158002 -
To inform in advance in case the above checks cannot be deposited for failure to replace the defective feeds.
Prepared by: Received by:
(signed) Edward Lim (signed) Ervin Lim11
Fuji states that it accepted the checks in good faith and believed that the account would finally be paid since Edward Lim assured Ervin Lim of the payment. However, upon presentment of the replacement checks, these were again dishonored due to another stop-payment order issued by Shrimp Specialists.12
Shrimp Specialists argues that despite the written agreement, Fuji deposited these checks without first replacing the defective feeds or at least informing Shrimp Specialists in advance that it would not replace the defective feeds. Thus, Shrimp Specialists contends that it was constrained to issue another stop-payment order for these checks.13
Fuji claims that despite repeated demands for payment, Shrimp Specialists failed to comply with its obligation to make good the replacement checks.14
Fuji filed criminal charges against the officers of Shrimp Specialists who signed the checks for violation of the Anti-Bouncing Checks Law. The charges were all dismissed.15 ???ñr?bl?š
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