G.R. No. 40709; August 1, 1934
ASTURIAS SUGAR CENTRAL, INC., plaintiff-appellant, vs. THE PURE CANE MOLASSES CO., INC., defendant-appellee.

FACTS

The parties entered into a contract whereby defendant agreed to buy all of plaintiff’s molasses. The contract gave defendant the option to cancel at any time upon payment of P6,000, which sum it had deposited in a bank as security. In January 1931, defendant demanded cancellation and tendered the P6,000, but plaintiff refused. In a prior case (G.R. No. 36026), the Supreme Court held that defendant had the right to cancel under the contract and that the cancellation was deemed consummated on November 18, 1932, the date defendant deposited the P6,000 with the clerk of court. Plaintiff then filed this action to recover damages for defendant’s refusal to purchase molasses from January 1931 to November 18, 1932.

ISSUE

Whether plaintiff is entitled to recover damages from defendant for its refusal to purchase molasses during the period from January 1931 to November 18, 1932.

RULING

No. The Supreme Court affirmed the dismissal of the complaint. The Court held that defendant’s good faith tender of the P6,000 in January 1931 was sufficient to exercise its option to cancel. Plaintiff’s refusal to accept the tender and consent to the cancellation constituted a breach of the contract by plaintiff. Consequently, plaintiff cannot base a cause of action on defendant’s non-performance of an obligation (to purchase molasses) that would have ceased to exist had plaintiff not itself breached the contract by wrongfully refusing the cancellation. To allow recovery would sanction plaintiff’s own breach.

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