REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

6th Judicial Region
BRANCH 49 - BACOLOD CITY
-oOo-

PEPSI COLA PRODUCTS PHILIPPINES,

INC., (PCPPI),
Plaintiff,

-versus- Civil Case No. 10-13641

For: Termination of Agreement
and Damages

TWENTY FIRST GATE CORPORATION,

Defendant.
x--------------------------------------------------------x

ANSWER WITH COUNTERCLAIM

COME NOW the Defendants, by the undersigned counsel and to this Honorable

Court most respectfully avers that:

1. Paragraphs 1 to 3 of the Complaint are Admitted.

2. Paragraph 4 of the Complaint is admitted but with the qualification that the

defendant was made to understand that the plaintiff would deliver its stocks

efficiently and on time so as not to hamper the business operations of the said

defendant.

3. Paragraph 5 of the Complaint is denied as the defendant did not comply with

its obligation in the subject contract to deliver FOUR HUNDRED THOUSAND

(P400,000.00) PESOS worth of Pepsi Products to the 21 Street Food Park but

rather, said plaintiff only delivered way less than said amount. Worse, the

plaintiff remitted the committed EIGHT HUNDRED THOUSAND

(P800,000.00) PESOS cash consideration in staggered amounts thereby

resulting to serious delays in the construction and initial business operations of

21 Street Food Park.

4. Paragraphs 6 and 7 of the Complaint are admitted with the qualification that

defendants only began selling carbonated softdrinks and non-carbonated

products of Coca Cola Bottlers Philippines, Inc. 21 Street Food Park for the

reason that it was plaintiff, Pepsi Cola Products Philippines, Inc., (hereinafter

referred to as plaintiff PCPPI, for brevity), that breached the subject contract

first by consistently failing to deliver the agreed stocks on time. The contention

of plaintiff PCPPI that defendant did not wait for its response after receiving

notice that said defendant will no longer sell PCPPI products is of no moment

since such requirement is not found in their contract.

5. Paragraph 8 is specifically denied because, as aforesaid, it was plaintiff

PCPPI that actually breached the subject contract first by consistently failing

to deliver stocks on time thereby resulting to sales losses on the part of the

defendant who were forced to buy stocks from a different supplier at a higher

price. There was no violation of the Exclusivity Agreement since the defendant

duly and diligently notified plaintiff PCPPI that it will no longer sell its

products through letters and this fact is even admitted by plaintiff PCPPI in

paragraph 6 of the Complaint.

6. Paragraphs 9 to 13 are specifically denied because the truth of the matter is

that during the said meeting, Mr. Ricky Trinidad never admitted his failure to

comply with the Exclusivity Agreement or offered to return the cash concession

but only said that he will refer the matter to the stockholders.

7. Paragraph 14 is specifically denied for on the contrary, it was the defendant

who suffered business losses on account of the consistent delivery and

remittance delays of the plaintiff.

8. Paragraph 15 is specifically denied for lack of knowledge as to the truth or

falsity thereof and that in fact, it was the defendant who suffered business

losses on account of the consistent delivery delays of the plaintiff.

9. Paragraphs 16 and 17 of the complaint are specifically denied as litigation is

unnecessary had the plaintiff just made necessary arrangements with the
 defendant on how the product deliveries and cash concessions were to be

made properly and efficiently. Moreover, no written demand was even made by

the plaintiff to the defendants to warn the latter that it will already file the

present case in court which is a matter of basic procedure.

SPECIAL AND AFFIRMATIVE DEFENSES

The defendants restate all the foregoing allegations and further allege that:

1. The plaintiff PCPPI gave cause for the defendant’s action of terminating the

Exclusivity Agreement for the following reasons:

a. Plaintiff PCPPI provided the defendant poor product support by failing to

deliver agreed stocks on time. Because plaintiff PCPPI failed to perform

its obligations under the Exclusivity Agreement, defendant had no other

choice but to buy stocks from a different supplier so as not to paralyze its

business operations at 21 Street Food Park and prejudice its

concessionaires in the same business establishment.

b. Product assistance provided by plaintiff PCPPI was likewise

unsatisfactory.

c. Reasoning that the cash concession was enough assistance, no

discounted price was actually given by plaintiff PCPPI to the defendant

who bought the products at a higher cost which is the same to the

Suggested Retail Price (SRP) and not under a Dealer’s Price.

d. Because of the slow customer support, defendant also discovered that its

concessionaires at 2 Street Food Park began contracting with other

agents of plaintiff PCPPI. This action of direct selling by plaintiff PCPPI

to the 21 Street Food Park concessionaires while knowing fully well that

there existed an Exclusivity Agreement between them and the defendants

is a clear showing of breach of contract on the part of the said plaintiff.

 2. The Exclusivity Agreement that plaintiff PCPPI presented to the defendant was

already in its final form. There was no contract drafting, negotiations, re-

negotiations, and finalization of stipulations. It was a very one-sided Agreement,

A Contract of Adhesion so to speak, without any rebate agreement, best price

clause or other detailed provisions that will amply protect the interest of the said

defendant.

3. Because of the consistent delay in the delivery of stocks by plaintiff PCPPI,

defendant was forced to buy stocks from another supplier at a higher price

resulting to lesser income than what was projected had the plaintiff PCPPI

complied with its obligation under the Exclusivity Agreement.

4. No legal demand was served upon the defendant prior to the filing of this case

which only proves to show the evident bad faith and malice of the said plaintiff

resulting to the damage and prejudice of the said defendant.

COUNTERCLAIM

The defendants incorporate and adopt all the foregoing allegations hereinbefore

made and further states that:

1. By plaintiff PCPPI’s consistent failure to deliver stocks on time, the defendant

has undoubtedly been prejudiced. Herein defendant’s goodwill and business

reputation has been damaged for it is the one truly disadvantaged by the

plaintiff’s initial acts of delay and now it is being dragged to court to protect his

rights. As a consequence thereof, the defendants is therefore entitled to claim

exemplary damages from the plaintiff in the amount of no less than FIVE

HUNDRED THOUSAND (P500,000.00) PESOS.

2. In order to protect its rights against the present malicious complaint, the

defendant was constrained to engage the services of counsel at an agreed fee of

FIFTY THOUSAND (P50,000.00) PESOS plus appearance fees of TWO

 THOUSAND (P2,000.00) PESOS per scheduled hearing to which plaintiff must

also be made to pay to said defendant.

PRAYER

WHEREFORE, premises considered, Defendants respectfully pray for judgment

to be rendered in his favor and against the plaintiff as follows:

1. Dismissing the complaint for obvious lack of merit;

2. On the Counterclaim, requiring the plaintiff to pay the defendant Trinidad:

a. FIVE HUNDRED THOUSAND (P500,000.00) PESOS by way of

exemplary damages;

b. FIFTY THOUSAND (P50,000.00) PESOS by way of attorney’s fees and

TWO THOUSAND (P2,000.00) PESOS appearance fees of counsel for

every scheduled hearing of this case.

The Defendant further prays for such other reliefs and remedies as may be

deemed just and proper in the premises.

MOST RESPECTFULLY SUBMITTED.

Bacolod City, Philippines. November 15, 2010.

PACIFICO M. MAGHARI, III

Counsel for the Defendant
C/O AMEGO & ASSOCIATES LAW OFFICE
GROUND FLOOR, CIT BLDG., LACSON-
LUZURIAGA STS., BACOLOD CITY
PTR No. 3793872 B. C. Jan. 4, 2010
IBP No. 766304 B. C. Dec. 9, 2009
ROLL OF ATTORNEY’S NO. 44869
MCLE COMPLIANCE III-0000762 1/14/09

COPY FURNISHED:

ATTY. RODOLFO S. CONVOCAR

ATTY. ROMMEL C. BELLONES
Counsels for the Plaintiff
Villa and Partners, Door 1, Paula Apartments
M. Jayme St., Jaro, Iloilo City
 VERIFICATION AND CERTIFICATION

I, RICARDO B. TRINIDAD, of legal age, married, Filipino and a resident of Bacolod

City, Philippines, after being duly sworn to in accordance with law, hereby depose and say that:

1. I am the authorized representative of the defendant in the above-entitled case.

2. I have caused the preparation of the foregoing Answer with Counterclaim.
3. I have read all the allegations thereof and that the same are true and correct of my
own personal knowledge and belief and based on authentic documents at hand.

That Pursuant to the Supreme Court Administrative Circular No. 04-94, I hereby further
certify that:

1. I have not therefore commenced any other action or proceeding involving the same
issues in the Supreme Court, the Court of Appeals, or any Tribunal or Agency;
2. To the best of my knowledge, no such action is pending before the Supreme Court, the
Court of Appeals, or any other Tribunal or Agency;
3. If I should hereafter learn that a similar action or proceeding has been filed or is pending
before the Supreme Court, the Court of Appeals, or any other Tribunal or Agency, I
undertake to report that fact within five (5) days therefrom to this Honorable Court.

IN WITNESS WHEREOF, I have hereunto affixed my signature this ____ day of

November, 2010 in the City of Bacolod, Philippines.

RICARDO B. TRINIDAD
Affiant

SUBSCRIBED AND SWORN to before me this _____ day of November, 2010, at the
City of Bacolod, Philippines, the affiant exhibited to me his Community Tax Certificate /
Government Issued ID _______________ issued at _________________ on
______________________.

Doc. No. _____;

Page No. ____;
Book No. ____;
Series of 2010.