GR 13203; (September, 1918) (Digest)
G.R. No. 13203 ; September 18, 1918
BEHN, MEYER & CO. (LTD.), plaintiff-appellant, vs. TEODORO R. YANCO, defendant-appellee.
FACTS:
Behn, Meyer & Co. (plaintiff) and Teodoro R. Yanco (defendant), through his agent Bazar Siglo XX, entered into a contract of sale. The contract stipulated the sale of 80 drums of caustic soda, 76 percent “Carabao” brand, at a price of $9.75 per 100 pounds, “c.i.f. Manila, pagadero against delivery of documents,” with shipment in March 1916. The merchandise was shipped from New York on April 12, 1916, aboard the steamship Chinese Prince. The ship was detained by British authorities at Penang, where 71 drums were confiscated. Only nine drums arrived in Manila. The defendant refused to accept these nine drums, alleging they were in bad order. The plaintiff offered the defendant the option to wait for the remainder of the shipment or to accept a substitution of 71 drums of similar grade from its stock, but the defendant refused. The plaintiff then sold 80 drums from its stock for the defendant’s account. The plaintiff sued to recover the difference between the contract price and the proceeds from that sale, claiming damages for breach of contract.
ISSUE:
Whether the plaintiff performed its obligations under the contract, thereby entitling it to recover damages from the defendant for the alleged breach.
RULING:
No. The Supreme Court affirmed the trial court’s judgment in favor of the defendant. The Court held that the plaintiff failed to perform the conditions precedent of the contract. The contract was for specific goods (“Carabao” brand) to be delivered in Manila under a “c.i.f.” term, with shipment in March 1916. The plaintiff did not tender the specific merchandise contracted for, as the substitute soda offered was not of the “Carabao” brand. Furthermore, the Court interpreted the “c.i.f. Manila” clause to mean that delivery was to be made at Manila, and the property in the goods would not pass until that delivery. Since the specific goods never arrived in Manila due to the confiscation, the plaintiff was in default. The shipment also failed to comply with the “March 1916” shipment term. Given the plaintiff’s breach of substantial particulars going to the essence of the contract, the defendant was entitled to rescind and was not liable. The plaintiff’s action for damages was therefore without merit.