Professional Documents
Culture Documents
5 - G.R. No. 23769. Song - Fo - Co. - v. - Hawaiian - Philippine - Co. (September 16, 1925)
5 - G.R. No. 23769. Song - Fo - Co. - v. - Hawaiian - Philippine - Co. (September 16, 1925)
Hilado & Hilado, Ross, Lawrence & Selph and Antonio T. Carrascoso, Jr., for
appellant.
Arroyo, Gurrea & Muller for appellee.
SYLLABUS
DECISION
MALCOLM , J : p
In the Court of First Instance of Iloilo, Song Fo & Company, plaintiff, presented a
complaint with two causes of action for breach of contract against the Hawaiian-
Philippine Co., defendant, in which judgment was asked for P70,369.50, with legal
interest, and costs. In an amended answer and cross-complaint, the defendant set up
the special defense that since the plaintiff had defaulted in the payment for the
molasses delivered to it by the defendant under the contract between the parties, the
latter was compelled to cancel and rescind the said contract. The case was submitted
for decision on a stipulation of facts and the exhibits therein mentioned. The judgment
of the trial court condemned the defendant to pay for the plaintiff a total of P35,317.93,
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with legal interest from the date of the presentation of the complaint, and with costs.
From the judgment of the Court of First Instance the defendant only has
appealed. In this court it has made the following assignment of errors: "I. The lower
court erred in nding that the appellant had agreed to sell to the appellee 400,000, and
not only 300,000, gallons of molasses. II. The lower court erred in nding that the
appellant rescinded without su cient cause the contract for the sale of molasses
executed by it and the appellee. III. The lower court erred in rendering judgment in favor
of the appellee and not in favor of the appellant in accordance with the prayer of its
answer and cross-complaint. IV. The lower court erred in denying appellant's motion for
a new trial." The speci ed errors raise three questions which we will consider in the
order suggested by the appellant.
1. Did the defendant agree to sell to the plaintiff 400,000 gallons of
molasses or 300,000 gallons of molasses? The trial court found the former amount to
be correct. The appellant contends that the smaller amount was the basis of the
agreement.
The contract of the parties is in writing. It is found principally in the documents,
Exhibits F and G. The rst mentioned exhibit is a letter addressed by the administrator
of the Hawaiian-Philippine Co. to Song Fo & Company on December 13, 1922. It reads:
"SILAY, OCC. NEGROS, P. I.
"December 13, 1922.
"MESSRS. SONG FO AND CO.
"Iloilo, Iloilo.
"DEAR SIRS: Confirming our conversation we had today with your Mr. Song
Fo, who visited this Central, we wish to state as follows:
"He agreed to the delivery of 300,000 gallons of molasses at the same
price as last year under the same condition, and the same to start after the
completion of our grinding season. He requested if possible to let you have
molasses during January, February and March or in other words, while we are
grinding, and we agreed with him that we would to the best of our ability, altho we
are somewhat handicapped. But we believe we can let you have 25,000 gallons
during each of the milling months, altho it interfere with the shipping of our own
and planters sugars to Iloilo. 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 gallons during
the next year the same to be taken by you before November 1st, 1923, along with
the 300,000, making 400,000 gallons in all.
"Regarding the payment for our molasses, Mr. Song Fo gave us to
understand that you would pay us at the end of each month for molasses
delivered to you.
"Hoping that this is satisfactorily and awaiting your answer regarding this
matter, we remain.
"Yours very truly,
"HAWAIIAN-PHILIPPINE COMPANY
"By: R.C. PITCAIRN
"Administrator."
Exhibit G is the answer of the manager of Song Fo & Company to the Hawaiian-
Philippine Co. on December 16, 1922. This letter reads:
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"December 16th, 1922.
"MESSRS. HAWAIIAN-PHILIPPINE CO.,
"Silay, Neg. Occ., P. I.
"DEAR SIRS: We are in receipt of your favors dated the 9th and the 13th
inst. and understood all their contents.
"In connection to yours of the 13th inst, we regret to hear that you
mentioned Mr. Song Fo the one who visited your Central, but it was not for he was
Mr. Song Heng, the representative and the manager of Messrs. Song Fo & Co.
"With reference to the contents of your letter dated the 13th inst. we
con rm all the arrangements you have stated and in order to make the contract
clear, we hereby quote below our old contract as amended, as per our new
arrangements.
"(a) Price, at 2 cents per gallon delivered at the central.
"(b) All handling charges and expenses at the central and at the dock
at Mambaguid for our account.
"(c) For services of one locomotive and at cars necessary for our six
tanks at the rate of P48 for the round trip dock to central and central to dock. This
service to be restricted to one trip for the six tanks.
"Yours very truly,
"SONG FO & COMPANY
"By__________________
"Manager."
We agree with appellant that the above quoted correspondence is susceptible of
but one interpretation. The Hawaiian-Philippine Co. agreed to deliver to Song Fo &
Company 300,000 gallons of molasses. The Hawaiian-Philippine Co. also believed it
possible to accommodate Song Fo & Company by supplying the latter company with an
extra 100,000 gallons. But the language used with reference to the additional 100,000
gallons was not a definite promise. Still less did it constitute an obligation.
If Exhibit T relied upon by the trial court shows anything, it is simply that the
defendant did not consider itself obliged to deliver to the plaintiff molasses in any
amount. On the other hand, Exhibit A, a letter written by the manager of Song Fo &
Company on October 17, 1922, expressly mentions an understanding between the
parties of a contract for 300,000 gallons of molasses.
We sustain appellant's point of view on the rst question and rule that the
contract between the parties provided for the delivery by the Hawaiian-Philippine Co. to
Song Fo & Company of 300,000 gallons of molasses.
2. Had the Hawaiian-Philippine Co. the right to rescind the contract of sale
made with Song Fo & Company? The trial judge answers No, the appellant Yes.
Turning to Exhibit F, we note this sentence: "Regarding the payment for our
molasses, Mr. Song Fo (Mr. Song Heng) gave us to understand that you would pay us at
the end of each month for molasses delivered to you." In Exhibit G, we nd Song Fo &
Company stating that they understand the contents of Exhibit F, and that they "con rm
all the arrangements you have stated, and in order to make the contract clear, we
hereby quote below our old contract as amended, as per our new arrangements. (a)
Price, at 2 cents per gallon delivered at the central." In connection with the portion of
the contract having reference to the payment for the molasses, the parties have agreed
on a table showing the date of delivery of the molasses, the account and date thereof,
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the date of receipt of account by plaintiff, and date of payment. The table mentioned is
as follows:
Date of receipt
Date of delivery Account and date of account by Date of payment
thereof
plaintiff