Song Fo and Co., vs. Hawaiian-Philippine Co.
to make the payments for the delivery of molasses
Facts: Hawaiian-Philippine Co. got into a contract
with Song Fo & Co. where it would deliver
molasses to the latter.
Hawaiian-Philippine Co. was able to deliver
55,006 gallons of molasses before the breach of
contract.
SFC filed a complaint for breach of contract
against Hawaiian-Philippine Co. and asked
P70,369.50. Hawaiian-Philippine Co. answered
that there was a delay in the payment from Song
Fo & Co. and that Hawaiian-Philippine Co. has
the right to rescind the contract due to that and
claims it as a special defense.
The judgment of the trial court condemned
Hawaiian-Philippine Co. to pay Song Fo & Co. a
total of P35,317.93, with legal interest from the
date of the presentation of the complaint, and with
costs.
Issue:
(1) Did Hawaiian-Philippine Co. agree to sell
400,000 gallons of molasses or 300,000 gallons of
molasses?
(2) Had Hawaiian-Philippine Co. the right to
rescind the contract of sale made with Song Fo &
Co.?
(3) On the basis first, of a contract for 300,000
gallons of molasses, and second, of a contract
imprudently breached by Hawaiian-Philippine
Co., what is the measure of damages?
Held:
(1) Only 300,000 gallons of molasses was agreed
to by Hawaiian-Philippine Co. as seen in the
documents presented in court. The language used
with reference to the additional 100,000 gallons
was not a definite promise.
(2) With reference to the second question, doubt
has risen as to when Song Fo & Co. was supposed
After 3 days, Tita Payag delivered to the
as shown in the documents presented by the
parties.
The Supreme Court said that Hawaiian-Philippine
Co. does not have the right to rescind the contract.
It should be noted that the time of payment
stipulated for in the contract should be treated as
of the presence of the contract. There was only a
slight breach of contract when the payment was
delayed for 20 days after which Hawaiian-
Philippine Co. accepted the payment of the
overdue accounts and continued with the contract,
waiving its right to rescind the contract. The delay
in the payment of Song Fo & Co. was not such a
violation for the contract.
(3) With regard to the third question, the first
cause of action of Song Fo & Co. 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 P3,000 should
be paid by 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.
Supreme Court said that Song Fo & Co. is not
entitled to recover anything under the second
cause of action because the testimony of Mr. Song
Heng will follow the same line of thought as that
of the trial court which in unsustainable and there
was no means for the court to find out what items
make up the P14,000 of alleged lost profits.
Sarmiento v. Sps. Cabrido and Sun
Dra. Virginia Lao, requested her to find
somebody to reset a pair of diamond
earrings into two gold rings.
Sarmiento sent a certain Tita Payag with
the pair of earrings to Dingdings Jewelry
Shop, owned and managed by respondent
spouses Luis and Rose Cabrido, accepted
the job order for P400
jewelry shop one of Dra. Laos diamond
earrings
Respondent Ma. Lourdes (Marilou) Sun
went on to dismount the diamond from
its original setting. Unsuccessful, she
asked their goldsmith, Zenon Santos, to
do it. Santos removed the diamond by
twisting the setting with a pair of pliers,
breaking the gem in the process
Petitioner required the respondents to
replace the diamond with the same size
and quality.
When they refused, the petitioner was
forced to buy a replacement in the
amount of P30,000
Respondent Marilou Sun (manager of
shop) admitted knowing Payag who came
to Dingdings Jewelry Shop to avail of
their services regarding a certain piece of
jewelry. After a short conversation,
Payag went inside the shop to see Santos
When the precious stone was broken by
Santos, Payag demanded P15,000 from
him. As the latter had no money, she
turned to Marilou for reimbursement
apparently thinking that Marilou was the
owner of the shop
Santos recalled that Payag requested him
to dismount what appeared to him was a
sapphire. While clipping the setting with
the use of a small pair of pliers, the stone
accidentally broke. Santos denied being
an employee of Dingdings Jewelry Shop.
Attempts to settle the controversy before
the barangay lupon proved futile
petitioner filed a complaint for damages
with the (MTCC) of Tagbilaran City
which rendered a decision in favor of the
petitioner: ordering defendants to pay
jointly and severally the amount of Thirty
Thousand Pesos (P30,000.00)
On appeal, the Regional Trial Court
(RTC) of Tagbilaran City, Branch 3,
reversed the decision of the MTCC, thus
 absolving the respondents of any
responsibility
Finding no reversible error, the Court of
Appeals (CA) affirmed the judgment of
the RTC
the petitioner filed the instant petition for
review
PETITIONER SARMIENTO:
dismounting of the diamond from its
original setting was part of the obligation
assumed by the private respondents under
the contract of service. Thus, they should
be held liable for damages arising from
its breakage
RESPONDENT: private respondents,
upheld by the RTC and the CA, is that
their agreement with the petitioner was
for crafting two gold rings mounted with
diamonds only and did not include the
dismounting of the said diamonds from
their original setting. Consequently, the
crux of the instant controversy is the
scope of the obligation assumed by the
private respondents under the verbal
contract of service with the petitioner and
denied assuming any obligation to
dismount the diamonds from their
original settings
SC ruled: it is beyond doubt that Santos
acted negligently in dismounting the
diamond from its original setting. It
appears to be the practice of the trade to
use a miniature wire saw in dismounting
precious gems, such as diamonds, from
their original settings; Santos employed a
pair of pliers in clipping the original
setting, thus resulting in breakage of the
diamond. The jewelry shop failed to
perform its obligation with the ordinary
diligence required by the circumstances;
Its subsequent breakage in the hands of
Santos could only have been caused by
his negligence in using the wrong
equipment
***those who in the performance of their
obligations are guilty of fraud, negligence
or delay and those who in any manner
contravene the tenor thereof, are liable
for damages. The fault or negligence of
the obligor consists in the omission of
that diligence which is required by the
nature of the obligation and corresponds
with the circumstances of the persons, of
the time and of the place***
DECISION: petition is GRANTED.
Private respondents Luis Cabrido and
Rose Sun-Cabrido are hereby ordered to
pay, jointly and severally, the amount
of P30,000 as actual damages and
P10,000 as moral damages
Chavez v. Gonzalez
plaintiff delivered to the defendant, who
is a typewriter repairer, a portable
typewriter for routine cleaning and
servicing.
defendant was not able to finish the job
after some time despite repeated
reminders made by the plaintiff, merely
gave assurances, but failed to comply
with the same.
defendant asked from the plaintiff the
sum of P6.00 for the purchase of spare
parts, which amount the plaintiff gave to
the defendant
after getting exasperated with the delay
of the repair of the typewriter, the
plaintiff went to the house of the
defendant and asked for the return of the
typewriter
defendant delivered the typewriter in a
wrapped package
plaintiff examined the typewriter returned
to him by the defendant and found out
that the same was in shambles, with the
interior cover and some parts and screws
missing.
plaintiff sent a letter to the defendant
formally demanding the return of the
missing parts, sum of P6.00
defendant returned to the plaintiff some
of the missing parts, the interior cover
and the P6.00
plaintiff had his typewriter repaired by
Freixas Business Machines, and the
repair job cost him a total of P89.85,
plaintiff commenced this action before
the City Court of Manila, demanding
from the defendant the payment of
P90.00 as actual and compensatory
damages,
DEFENDANT GONZALEZ: repair done
on the typewriter by Freixas Business
Machines with the total cost of P89.85
should not, however, be fully chargeable
against the defendant. The repair invoice,
Exhibit C, shows that the missing parts
had a total value of only P31.10.
SC ruled WHEREFORE, judgment is
hereby rendered ordering the defendant to
pay the plaintiff the sum of P31.10,
Plaintiff appealed: court awarded only the
value of the missing parts of the
typewriter, instead of the whole cost of
labor and materials that went into the
repair
According to Art. 1167, If a person
obliged to do something fails to do it, the
same shall be executed at his cost.This
same rule shall be observed if he does it
in contravention of the tenor of the
obligation. Furthermore, it may be
decreed that what has been poorly done
be undone
Gonzalez argued: he is not liable at all,
not even for the sum of P31.10, because
his contract with plaintiff- appellant did
not contain a period, so that plaintiff-
appellant should have first filed a petition
for the court to fix the period, under
Article 1197 of the Civil Code, within
which the defendant-appellee was to
comply with the contract before said
defendant-appellee could be held liable
for breach of contract.
 SC says: Defendant cannot invoke
Article 1197 of the Civil Code for he
virtually admitted non-performance by
returning the typewriter that he was
obliged to repair in a nonworking
condition, with essential parts missing.
The fixing of a period would thus be a
mere formality and would serve no
purpose than to delay
DECISION: defendant-appellee
contravened the tenor of his obligation
because he not only did not repair the
typewriter but returned it in shambles,
according to the appealed decision. For
such contravention, as appellant
contends, he is liable under Article 1167
of the Civil Code, jam quot, for the cost
of executing the obligation in a proper
manner. The cost of the execution of the
obligation in this case should be the cost
of the labor or service expended in the
repair of the typewriter, which is in the
amount of P58.75. because the obligation
or contract was to repair it.
In addition, the defendant-appellee is
likewise liable, under Article 1170 of the
Code, for the cost of the missing parts, in
the amount of P31.10, for in his
obligation to repair the typewriter he was
bound, but failed or neglected, to return it
in the same condition it was when he
received it.
Cetus Development v. CA
Private respondents were the lessees of
the premises originally owned by Susana
Realty.
The payments of the rentals were paid by
them to a collector of the Susana Realty
who went the premises monthly.
Susana Realty, however, sold the
property to petitioner Cetus
Development, Inc.
The private respondents then continued
to pay their monthly rentals to a collector
sent by the petitioner. In succeeding
months, for three months, the private demands from them the fulfillment of
respondents failed to pay their rentals their obligation.
because no collector came. The moment the petitioner extrajudicially
They then contacted the petitioner over demand the payment of the rentals,
the telephone as to where they should pay private respondents immediately
their rentals. The petitioner then told answered their obligation by paying their
them that they would send a collector to arrearages of rentals to the petitioner.
collect the rentals. It could not be said that they were in
Private respondents waited but no default in the payment of their rentals as
collector came. the delay in paying the same was not
Petitioner then sent a letter to each of the imputable to them. Rather, it was
private respondents demanding that they attributable to petitioner's omission or
vacate the subject premises and to pay neglect to collect.
their arrearages within 15 days from the
receipt thereof. NPC v. CA
With this, private respondents
immediately upon the receipt of such
demand, tendered their payments which
were accepted by the petitioner with the
condition that the acceptance was
without prejudice to the filing of
ejectment suit.
For failure of the private respondents to
vacate the premises as demanded,
petitioner filed an ejectment suit against
them.
ISSUE: Whether or not there was a delay
of payment by the private respondents to
the petitioner considering that upon
receipt of the demand letter, they
immediately tendered their payments.
HELD: No. There was no failure yet on
the part of the private respondents to pay
rents for three consecutive months.
It has been duly established that it has
been customary for private
respondents to pay their rentals
through a collector sent by the lessor.
Article 1169 of the Civil Code provides
that those obliged to deliver or to do
something incur in delay from the time
the oblige judicially or extrajudicially