SONG Fo & COMPANY vs HAWAIIAN PHILIPPINE Co. GR # 47 Phil 821 Petitioner/Plaintiff : SONG Fo & COMPANY, Defendant/Appellant: HAWAIIAN PHILIPPINE Co. Date September 16, 1925 SPECIAL NOTE
This is the previous digest made by Belle, I only added some notes, so just check that out. DOCTRINE Rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial substantial and fundamental fundamental as to defeat the object of the parties in making the agreement. (SHORT VERSION)
Parties agreed to deliver 300,000 gallons of molasses and added 100,000 if means be possible. Defendant rescinded the contract on the ground that the plaintiff defaulted the payment. FACTS
A written contract between Song Fo & Co. and Hawaiian-Philippine Co. was made. They have agreed to deliver 300,000 gallons of molasses. Mr. Song Heng, the representative of Song Fo & Co., demanded that an additional 100,000 gallons be delivered. It was written as follows: “Mr. Song Fo also asked if we could supply him with another 100,000 gallons of molasses, and we stated we believe that this is possible and will do our best to let you have these extra 100,000 100,0 00 gallons…” The gallons…” The payment for these molasses shall be done at the end of each month. Plaintiff presented a complaint with two causes of action for breach of contract against the defendant, in which judgment was asked for P70,369.50. Defendant Defendant set up the special defense that the plaintiff delayed the payment for the molasses, compelling the former to cancel and rescind the contract.
breached by Hawaiian Philippine Co., what is the measure for damages? – damages? – See Ratio. RATIO
(1) The contract has clearly shown the agreed 300,000 gallons of molasses to be delivered. It was the additional 100,000 gallons that Mr. Song Ho requested that this issue has arisen. Although the defendant mentioned that providing such an amount was possible, it only constituted a definite promise and not an obligation. (2) Plaintiff was to pay defendant at the end of each month. The records show, however, that for the delivery made in December 1922, the payment was not made until February 20, 1923. The Supreme Court stated a delay in payment for a small quantity of molasses for some twenty days is not such a violation of an essential condition of the contract as warrants rescission for non performance. performance. (3) The first cause of action of the plaintiff is based on the greater expense to which it was put in being compelled to secure molasses from other sources to which Supreme Court ruled that P3000 should be paid by Hawaiian-Philippine Hawaiian-Philippine Co. with legal interest from October 2, 1923 until payment. The second cause of action was based on the lost profits on account of the breach of contract. The Supreme Court, however, did not affirm any recovery as regards this cause. It reasoned out that it has found the decision of the trial court unsustainable; the testimony of Mr. Song Heng will follow the same line of thought. In addition, his testimony was thought to be insufficient proof of allegations of the complaint and will lead only to a mere conclusion and not a proven fact. The Supreme Court said that it did not have the means of knowing the alleged lost profits of P14000. “We rule rule that the plaintiff is entitled to recover damages from the defendant for breach of contract on the first cause of action in the amount of P3000 and on the second cause of action in no amount.”
ISSUES/HELD
DECISION
(1) Did defendant agree to sell to the plaintiff 400,000 gallons of molasses or 300,000 gallons of molasses? – 300,000
Agreeable to the foregoing, the judgment appealed from shall be modified and the plaintiff shall have and recover from the defendant the sum of P3000, with legal interest from October 2, 1923, until payment. Without special finding as to costs in either instance, instance, it is so order.
(2) Had the Hawaiian-Philippine Co. the right to rescind the contract of sale made with Song Fo & Co.? – No.
NOTE
(3) On the basis first, of a contract for 300,000 gallons of molasses, and second, of a contract imprudently
Take note that the reason why there is no breach in the part of Song-Fo while there is in the part of HawaiianPhil is that the court did not recognize the non-payment of Song-Fo to Hawaiian-Phil as a breach but still Hawaiian-Phil, upon non-payment of Song-Fo, moved to cancel and rescind the said contract. Thus in the eyes and reasoning of the court, it was the Hawaiian-Phil which first violated the contract. Also, the reason why the court did not recognize that the non-payment of Song-Fo as a breach is for the fact that after month of non-payment, Song-Fo suddenly resumed to pay their monthly obligations to Hawaiian-Phil and that the latter accepted it. The court reasoned that a delay in payment for a small quantity of molasses for some twenty days is not such a violation if an essential condition of the contract as warrants rescission for non performance.
L3 and O
