Visayan Sawmill v. CA (1993) Petitioners: VISAYAN Petitioners: VISAYAN SAWMILL COMPANY, INC. Respondents: CA and and R! R! "RA# "RA#IN IN$, $, R%PR R%PR%S %S%N %N"% "%# # &Y RAMO RAMON N . !I&I !I&ION ONA# A#A, A, PROPRI%"OR Ponente: #AVI#%, Ponente: #AVI#%, R. Topic: R'm'di's * &*'a+ SUMMARY: (1- s'n/'n+' s0mma*y a+/s, iss0', *a/i and *0lin) FACTS: 1.) On May 1, 1923 1923 R! "*adin "*adin and Visayan Visayan Sawmill Sawmill Cm4any (VSC) (VSC) 'n/'*'d 'n/'*'d in/ a Purch Purchas ase e and Sale Sale of Scrap Scrap Iron Iron l+a/'d l+a/'d a/ VSC5s VSC5s s/+6ya* s/+6ya*d d a/ N'*s N'*s O*i'n/al O*i'n/al,, subject to the condition that RJ !ill open a "etter of Credit #"$C% of P&'()((( in fa*or of +SC on or before Ma, -') -./01 .) On May 17, 1923, 1923, R! /*0 /*0 is m'n s/a*/'d s/a*/'d / di and and a/'* and and s+*a4 i*n a/ /' /' VSC8s 4*'mis's, 4*+''din 0n/il May 3 w'n VSC all''dly di*'+/'d R!8s m'n / d'sis/ *m 40*s0in /' w*6 in vi'w an all''d +as' il'd aains/ R! :y Al:'*/ P0*s0'l. 01% +SC +SC denie denies s this) this) alle2i alle2in2 n2 that on Ma, &0) -./0) -./0) the, sent a tele2 tele2ra3 ra3 to RJ RJ cancelin2 the contract of sale because of the failure of the latter to co3pl, !ith the conditions thereof1 41% $n Ma, &4) -./0) -./0) RJ infor3ed infor3ed +SC that the "$C "$C !as opened opened Ma, -&) -./0 -./0 at 5PI 3ain office in A,ala) but the trans3ittal !as dela,ed1 ;.) On May <, <, 1923, +SC recei*ed a letter ad*ice fro3 5PI 6u3a2uete statin2 that an irre*ocable do3estic "$C P&'()((( !as opened in fa*or of An2 Ta, c7o +SC on account of Ar3aco8Ar3steel Allo, Corporation1 <.) On 0ly 19, 1923, R! "*adin "*adin s'n/ s'n/ a s'*i's s'*i's /'l'*ams /'l'*ams s/a/in s/a/in /a/ /' +as' il'd aains/ im :y P0*s0'l ad :''n dismiss'd and d'mandin /a/ VSC +m4ly wi/ /' d''d sal', /'*wis' a +as' will :' il'd aains/ /'m. 7.) On 0ly , 1923, 1923, VSC in*m'd in*m'd R! /a/ /'y w'*' w'*' 0nwillin / +n/in0' +n/in0' wi/ /' sal' sal' d0' / R!8s ail0*' / +m4ly wi/ 'ss'n/ial 4*'-+ndi/ins /' +n/*a+/. 2.) On 0ly 9, 1923, 1923, R! il'd /' +m4lain/, +m4lain/, 4*ayin * =0dm'n/ =0dm'n/ *d'*in VSC VSC / +m4ly wi/ /' +n/*a+/ :y d'liv'*in / im /' s+*a4 i*n s0:='+/ /'*'> ' 0*/'* s0/ a+/0al, m*al and '?'m4la*y dama's, a//*n'y8s ''s and /' +s/s /' s0i/. 9.) VSC VSC insis insis/'d /'d /a/ /' /' +an+' +an+'lla lla/i /in n /' /' +n/* +n/*a+/ a+/ was =0s/i =0s/ii' i'd d :'+a :'+a0s' 0s' R!5s R!5s nn+ nn+m4l m4lian ian+' +' wi/ wi/ 'ss'n 'ss'n/ia /iall 4*'-+ 4*'-+nd ndi/i i/ins ns,, amn amn wi+ wi+ is /' 4'ni 4'nin n an i**'v+a:l' and 0n+ndi/inal LOC n/ la/'* /an 1; May 1923. 1.) R"C *0l' *0l'd d in in R! R!55s a av* v*, aw awa*din *din / /' da dama ma's s s0/. 11.) CA ai*m'd, ldin@ - VSC VSC a*0 a*0'd 'd /a/ /a/ 0nd' 0nd'** A*/i+ */i+l' l's s 1;93 1;93 and 1;97 1;97 /' Civil Civil Cd', Cd', a0/m a0/ma/ a/i+ i+ *'s+issin may /a6' 4la+' :y a m'*' n/i+' / /' :0y'* i /' la//'* +mmi//'d a :*'a+ /' +n/*a+/ sal'. %v'n i n' w'*' / *an/ /a/ /'*' was a :*'a+ /' +n/*a+/ :y /' :0y'*, a0/ma/i+ *'s+issin +ann/ /a6' 4la+' :'+a0s'
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1.)
d'liv'*y ad al*'ady :''n mad'. And, in +as's w'*' /'*' as al*'ady :''n d'liv'*y, /' in/'*v'n/in /' +0*/ is n'+'ssa*y / ann0l /' +n/*a+/. R's+issi R's+issin n in +as's +as's allin allin 0nd' 0nd'** A*/i+l A*/i+l' ' 1191 1191 /' /' Civil Civil Cd' Cd' is always always s0:='+ s0:='+// / *'vi'w :y /' +0*/s and +ann/ :' +nsid'*'d inal. In /is, /' /*ial +0*/ *0l'd /a/ *'s+issin is im4*4'* :'+a0s' /' :*'a+ was v'*y sli/ and /' d'lay in 4'nin /' LOC was nly 11 days. !'n+', /' a44'al / SC :y VSC.
ISSU9S: WON VSC 4*4'*ly *'s+ind'd /' +n/*a+/ o Y%S. Wa/ :/ains in /is +as' is a m'*' +n/*a+/ / s'll * 4*mis' / s'll, and n/ a +n/*a+/ sal'. o "' R"C ass0m'd /a/ /' /*ansa+/in is a +n/*a+/ sal' and, inl0'n+'d :y i/s vi'w vi'w /a/ /a/ /'*' /'*' was was an im4l im4li'd i'd d'liv' d'liv'*y *y /' /' :='+ :='+// /' /' a*'' a*''m' m'n/ n/,, +n+l0d' +n+l0d'd d /a/ A1;93, A1;93, NCC was ina44li+a ina44li+a:l'. :l'. I/ *0l'd *0l'd /a/ *'s+issin *'s+issin 0nd'* 0nd'* A1191, A1191, NCC +0ld nly :' dn' =0di+ially. =0di+ially. I/ 0*/'* +lassii'd /' :*'a+ +mmi//'d :y /' 4*iva/' *'s4nd'n/ as sli/ * +as0al, *'+lsin, /'*':y, VSC5s *i/ / *'s+ind /' a*''m'n/. AR". 1;93. Wi/ *'s4'+/ / mva:l' 4*4'*/y, /' *'s+issin /' sal' sall *i/ /a6' 4la+' in /' in/'*'s/ /' v'nd*, i /' v'nd'', 04n /' '?4i*a/in /' 4'*id i?'d * /' d'liv'*y /' /in, s0ld n/ av' a44'a*'d / *'+'iv' i/, *, avin a44'a*'d, ' s0ld n/ av' /'nd'*'d /' 4*i+' a/ /' sam' /im', 0nl'ss a ln'* 4'*id as :''n s/i40la/'d * i/s 4aym'n/. o S0s/a S0s/aini inin n R"C, R"C, CA +i/'d +i/'d A1B9 A1B97@ 7@ "' "' /in /in sld sld sall sall :' 0nd' 0nd'*s/ *s/ d d as d'liv'*'d, w'n i/ is 4la+'d in /' +n/*l and 4ss'ssin /' v'nd''. VSC8s VSC8s :li :lia/ a/in in / s'll s'll is 0n'D 0n'D0iv 0iv+a +ally lly s0:=' s0:='+/ +/ / a 4si/ 4si/iv' iv' s0s4' s0s4'nsi nsiv' v' o +ndi/ +ndi/in in,, i.'., i.'., R!5s R!5s 4'n 4'nin in,, ma6in ma6in * ind*s ind*sin in an i**'v i**'v+a +a:l' :l' and and 0n+ndi/inal LOC. VSC a*''d / d'liv'* /' s+*a4 i*n nly 04n 4aym'n/ /' /' 40*+ 40*+a as' s' 4*i+ 4*i+' ' :y m'an m'ans s an i**' i**'v v+a +a:l :l' ' and and 0n+ 0n+nd ndi/ i/i ina nall LOC. LOC. $ther!ise stated) the contract is not one of sale !here the bu,er acuired o!nership o*er the propert, subject to the resolutor, condition that the purchase price !ould be paid after deli*er,1 "0s, /'*' was / :' n a+/0al sal' 0n/il /' 4'nin, ma6in * ind*sin /' i**'v+a:l' and 0n+ndi/inal LOC. LOC. Since !hat obtains here is a 3ere pro3ise to sell) RJ;s failure to co3pl, !ith the positi*e suspensi*e condition cannot e*en be considered a brea breach ch casu casual al or seri seriou ous s but but si3p si3pl, l, an e*en e*entt that that pre* pre*en ente ted d the the obli2ation of petitioner corporation to con*e, title fro3 acuirin2 bindin2 force1 o N/ nly did R! ail / 4'n, ma6' * ind*s' an i**'v+a:l' and 0n+ndi/inal LOC n * :'*' 1; May 1923 d's4i/' is 'a*li'* *'4*'s'n/a/in in is B May 1923 /'l'*am /a/ ' ad 4'n'd n' n 1 May 1923, /' l'//'* advi+' VSC *'+'iv'd n < May 1923 *m &PI #0ma0'/' Ci/y :*an+ '?4li+i/ly ma6's *''*'n+' / /' 4'nin n /a/ da/' a LOC in av* 4'/i/in'* An "ay "ay +E
o
Visayan Visayan Sawmill Sawmill C. In+., In+., d*awn d*awn wi/0/ wi/0/ *'+0*s' *'+0*s' n ARMACO ARMACOMARS MARS"%%L "%%L ALLOY CORPORA CORPORA"ION "ION and s'/ / '?4i*' n B 0ly 1923, wi+ is indis40/a:ly indis40/a:ly n/ in a++*dan+' wi/ /' s/i40la/in in /' +n/*a+/ sin'd :y /' 4a*/i's n a/ l'as/ /*'' (3) +0n/s : #-% it !as not opened) 3ade or indorsed b, RJ) but b, a corporation !hich is not a part, to the contract< #&% it !as not opened !ith the ban= a2reed upon< and #0% it is not irre*ocable and unconditional) for it is !itho !ithout ut recours recourse) e) it is set set to e>pire e>pire on a spec specifi ific c date date and and it stipulates certain conditions conditions !ith respect to ship3ent1 In all 4*:a:ili/y, R! may av' av' sld /' s0:='+/ s0:='+/ s+*a4 s+*a4 i*n / ARMACO ARMACOMARS MARS"%%L "%%L,, * /'*wis' /'*wis' assin'd / i/ /' +n/*a+/ wi/ VSC. R! 8s +m4lain/ ails / dis+ls' /' s0dd'n 'n/*y in/ /' 4i+/0*' /is +*4*a/in. Conseuentl,) the obli2ation of +SC to sell did not arise< it therefore cannot be co3pell co3pelled ed b, specific specific perfor3an perfor3ance ce to co3pl, co3pl, !ith its prestation prestation11 In s*/, A1191 d's n/ a44ly> n /' +n/*a*y, 40*s0an/ / A1;97, VSC may //ally *'s+ind, as i/ did in /is +as', /' +n/*a+/. AR". 1;97. W'*' /' ds av' n/ :''n d'liv'*'d / /' :0y'*, and /' :0y'* as *'40dia/'d /' +n/*a+/ sal', * as mani's/'d is ina:ili/y / 4'**m is :lia/ins, /'*'0nd'*, * as +mmi//'d a :*'a+ /'*', /' s'll'* may //ally *'s+ind /' +n/*a+/ sal' :y ivin n/i+' is 'l'+/in s / d / /' :0y'*.
?$T9S: R$M9R$) R$M9R$) dissenti dissentin2: n2: A 4*visin in /' +n/*a+/ *'a*din /' md' 4aym'n/, li6' /' *'D0i*'m'n/ *'D0i*'m'n/ * /' 4'nin /' LOC in /is +as', is n/ amn /' 'ss'n/ial 'ss'n/ial *'D0i*'m'n/s a +n/*a+/ sal' 'n0m'*a/'d 'n0m'*a/'d in A13; and 1B7B, /' a:s'n+' any wi+ will 4*'v'n/ /' 4'*'+/in /' +n/*a+/ *m a44'nin. "i=e!ise) not e*er, pro*ision re2ardin2 pa,3ent should auto3aticall, be classified as a suspensi*e condition1 To do so !ould chan2e the nature of 3ost contracts of sale into contracts to sell1 For a pro*ision in the contract re2ardin2 the pa,3ent of the price to be considered a suspensi*e condition) the parties 3ust ha*e 3ade this clear in certain and una3bi2uous ter3s , s0+ as * ins/an+' ins/an+',, b, reser*in2 or !ithholdin2 title to the 2oods until full pa,3ent b, the bu,er1 Nw'*' in /' +n/*a+/ did i/ s/a/' /a/ /' VSC *'s'*v' /i/l' / /' ds 0n/il R! as 4'n'd a LOC. LOC. N* N* is /'*' /'*' any 4*visi 4*visin n d'+la d'+la*in *in /' +n/*a+ +n/*a+// as wi/ wi/0/ 0/ '' ''+/ +/ 0n/il 0n/il a/' a/'** /' 0lillm'n/ /' +ndi/in *'a*din /' 4'nin /' LOC. "' a*''m'n/ :'/w''n /' 4a*/i's was a +n/*a+/ sal' and /' /'*ms and +ndi/ins 'm:di'd /'*'in /'*'in wi+ a*' s/anda*d *m, a*' +l'a*ly *'sl0/*y in na/0*', /' :*'a+ wi+ may iv' 'i/'* 4a*/y /' 4/in / :*in an a+/in / *'s+ind andE* s''6 dama's. Cn/*a*y / /' +n+l0sins a**iv'd a/ in /' 4n'n+ia, /' /*ansa+/in is n/ a +n/*a+/ / s'll :0/ a +n/*a+/ sal'. "' 4n'n+ia, n/wi/s/andin i/s +n+l0sin /a/ n +n/*a+/ sal' '?is/'d, 4*+''d'd / s/a/' VSC may *'s+ind /' +n/*a+/ :as'd n A1;97 /' Civil Cd' wi+ '?4*'ssly a44li's nly / a +n/*a+/ sal'. "' 4n'n+ia was /'n +n*n/'d wi/ /' iss0' d'liv'*y sin+' A*/i+l'
1;97 a44li's nly FwG'*' /' ds av' n/ y'/ :''n d'liv'*'d. In /is +as', /' w*6'*s R! w'*' a+/0ally allw'd / VSC5s 4*'mis's, /0s, ivin /'m +n/*l and 4ss'ssin /' ds. A/ /is =0n+/0*', i/ is 'v'n 0nn'+'ssa*y / dis+0ss /' iss0' d'liv'*y in *'la/in / /' *i *i// *'s+ *'s+is issi sin n n* n* / *'ly *'ly n A1;9 A1;97. 7. In e*er, e*er, contract contract !hich !hich contain contains s reciproc reciprocal al obli2ations) obli2ations) the ri2ht to rescind is al!a,s i3plied under A--.A--.- in case one of the parties fails to co3pl, !ith his obli2ations1 VSC +laims /a/ /' :*'a+ is s s0:s/an/ial as / =0s/iy *'s+issin, n/ nly :'+a0s' /' LOC was n/ 4'n'd n May 1;, 1923 as s/i40la/'d in /' +n/*a+/ :0/ als :'+a0s' /' llwin a+/*s@ (1) /' LOC, al/0 4'n'd in av* VSC was mad' aains/ /' a++0n/ a +'*/ain Ma*s/''l Ally C*4*a/in, ins/'ad 4*iva/' *'s4nd'n/8s a++0n/> () /' LOC *''**'d / ass*/'d s/''l s+*a4 ins/'ad s+*a4 i*n and =0n6 as 4*vid'd in /' +n/*a+/> (3) /' LOC LOC 4la+ 4la+'d 'd /' /' D0an D0an/i /i/y /y /' /' d ds s a/ ; ; M" M" wil wil' ' /' /' +n/ +n/*a *a+/ +/ m'n/ m'n/i in' n'd d an an 0nd'/'*min'd D0an/i/y s+*a4 i*n and =0n6> (B) n am0n/ *m /' LOC will :' *'l'as'd 0nl'ss a++m4ani'd :y a C'*/ii+a/' A++'4/an+'> and (;) /' LOC ad an '?4i*y da/'. I am n/ +nvin+'d /a/ /' a:v' +i*+0ms/an+'s may :' +a*a+/'*iH'd as s s0:s/an/ial and 0ndam'n/al as / d''a/ /' :='+/ /' 4a*/i's in ma6in /' a*''m'n/. Nn' /' all''d d''+/s in /' LOC w0ld s'*v' / d''a/ /' :='+/ /' 4a*/i's. I/ is / :' s/*'ss'd /a/ /' 40*4s' /' 4'nin a LOC is / ''+/ 4aym'n/. "' a:v'm'n/in'd a+/*s +0ld n/ av' 4*'v'n/'d 4*'v'n/'d s0+ 4aym'n/. I/ is als sinii+an/ / n/' /a/ VSC s'n/ a /'l'*am / R! n May 3, 1923 +an+'llin /' +n/*a+/. "is was :'*' /'y ad 'v'n *'+'iv'd n May <, 1923 /' n/i+' *m /' :an6 a:0/ /' 4'nin /' LOC. !w +0ld /'y av' mad' a =0dm'n/ n /' ma/'*iali/y /' 4*visins /' LOC * 40*4s's *'s+indin /' +n/*a+/ 'v'n :'*' s'//in 'y's n said d+0m'n/
