Jenny Chen
The Supreme Court rendered the 109-Tai-Shang-1172 Decision of July 15, 2020 (hereinafter, the “Decision”), holding that since the application of the short two-year statute of limitations to Article 127, Subparagraph 8 of the Civil Code comes with the price of goods or products from the recurrent and frequent transactions, a transaction should be carried out as soon as possible, regardless of the volume and amount of the transaction.
According to the facts underlying this Decision, the Appellee asserted that the Appellant had purchased the oil products at issue separately from the Appellee in 2014 for a total price of NT$2.17 million. It was agreed that the price would be paid on the monthly basis within 60 days. After the price of the oil products returned by the Appellant was deducted, the outstanding payment for the goods in the amount of NT$2.14 million (hereinafter, the “Goods Payment at Issue”) was still owed. Even though collection attempts were made several times, still there was no response. Therefore, a complaint was filed in accordance with Article 367 and Article 233, Paragraph 1 of the Civil Code to seek a court decision to compel the Appellant’s payment. The Appellant contended as follows. It was not until 2017 that the Appellee began to apply to the first instance court for a payment order, but the right of claim over the Goods Payment at Issue expired due to the expiration of the two-year statute of limitations under Article 127, Subparagraph 8 of the Civil Code. In addition, since the Appellant did not admit the claim and the Appellee had not done anything to lawfully suspend the statute of limitations, the Appellant may refuse to pay.
According to this Decision, Article 127, Subparagraph 8 of the Civil Code provides that the short two-year statute of limitations shall apply to the prices for the goods and products provided by merchants, manufacturers, and handicraft people. Since such prices should be preferably performed as soon as possible as they take place mostly to recurrent and frequent transactions, a shorter statute of limitations is granted to rapidly conclude them, and there is no absolute connection with the volume and amount of the transaction. If the parties supply goods and products for sale under their business registration items, the sales activities can be presumed to be their daily and frequent trading activities. Therefore, the payments they receive are certainly governed by the above shorter statute of limitations.
It was further pointed out in this Decision that the Appellee was found in the original trial to request the goods payment from the Appellant for the purpose of the oil products at issue out of the legal relationship of a sales contract. The original trial court could tell, based on the customer sales statements, delivery notes and company registration data produced by the Appellee, that the transactions in this case pertain to the Appellee as an edible oil manufacturer who had sold its oil products to the Appellant, a food processing company with the goods ordered and shipped at large quantities by batch and paid on a monthly basis within 60 days. Such trading pattern, which shows that the goods were not objects regularly consumed and frequently traded in daily lives in terms of the objects, quantities and amounts, does not reflect regular and customary trading behavior. However, the Appellant’s business registration items include the manufacture and wholesale of edible oils and fats and the wholesale of edible oils and fats. Therefore, this calls into question if the above short statute of limitations does not apply because the Goods Payment at Issue was not incurred by its frequent daily trading behavior. Since there is still a doubt, it should certainly be clarified. Without exploring if there were related or similar transactions between the parties other than the transactions in question over a long period of time, the original trial court was rash when it jumped to the conclusion that the 15-year statute of limitations under Article 125 of the Civil Code should apply to the claim over the Goods Payment at Issue and rendered a decision unfavorable to the Appellant. The gist of the appeal was not groundless.