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VOL. 133, DECEMBER 19, 1984 567

Chrysler Philippines Corp. vs. Court of Appeals
*
No. L-55684. December 19, 1984.

CHRYSLER PHILIPPINES CORPORATION, petitioner, vs. THE

HONORABLE COURT OF APPEALS and SAMBOK MOTORS
CO. (BACOLOD), respondents.

Civil Law; Sales; Where the seller delivers to the buyer a quantity of
goods less than he contracted to sell, the buyer may reject them.—Under the
circumstances, Sambok, Bacolod, cannot be faulted for not accepting or
refusing to accept the shipment from Negros Navigation four years after
shipment. The evidence is clear that Negros Navigation could not produce
the merchandise nor ascertain its whereabouts at the time Sambok Bacolod,
was ready to take delivery. Where the seller delivers to the buyer a quantity
of goods less than he contracted to sell, the buyer may reject them.
Same; Same; General rule that before delivery, the risk of loss is borne
by the seller who is still the owner, under the principle of res petit domino;
Case at bar.—From the evidentiary record, Negros Navigation was the
party negligent in failing to deliver the complete shipment either to Sambok,
Bacolod, or to Sambok, Iloilo, but as the Trial Court found, petitioner failed
to comply with the conditions precedent to the filing of a judicial action.
Thus, in the last analysis, it is petitioner that must shoulder the resulting
loss. The general rule that before delivery, the risk of loss is borne by the
seller who is still the owner, under the principle of “res perit domino”, is
applicable in petitioner’s case.

PETITION for review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Reyes, Santayana, Tayao & Picazo Law Office for petitioner.
Alampay, Alvero & Alampay Law Office for private
respondent.

MELENCIO-HERRERA, J.:

Subject of this Petition for Review is the Decision of the then Court
of Appeals in CA-G.R. No. 65328-R reversing the

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* FIRST DIVISION.

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568 SUPREME COURT REPORTS ANNOTATED

Chrysler Philippines Corp. vs. Court of Appeals

judgment of the then Court of First Instance of Rizal, Branch XX, in

Civil Case No. 16624, and dismissing petitioner Chrysler
Philippines Corporation’s suit for Damages against private
respondent Sambok Motors Company (Bacolod) arising from breach
of contract.
Petitioner is a domestic corporation engaged in the assembling
and sale of motor vehicles and other automotive products.
Respondent Sambok Motors Co., a general partnership, during the
period relevant to these proceedings, was its dealer for automotive
products with offices at Bacolod (Sambok, Bacolod) and Iloilo
(Sambok, Iloilo). The two offices were run by relatives. Miguel Ng
was Assistant Manager for Sambok,
1
Bacolod, while an elder brother,
Pepito Ng, was the President.
On September 7, 1972, petitioner filed with the Court of First
Instance of Rizal, Branch XX, Pasig, Rizal, a Complaint for
Damages against Allied Brokerage Corporation, Negros Navigation
Company and Sambok, Bacolod, alleging that on October 2, 1970,
Sambok, Bacolod, ordered from petitioner various automotive
products worth P30,909.61, payable in 45 days; that on November
25, 1970, petitioner delivered said products to its forwarding agent,
Allied Brokerage Corporation, for shipment; that Allied Brokerage
loaded the goods on board the M/S Dona Florentina, a vessel owned
and operated by Negros Navigation Company, for delivery to
Sambok, Bacolod; that when petitioner tried to collect from the
latter the amount of P31,037.56, representing the price of the spare
parts plus handling charges, Sambok, Bacolod, refused to pay
claiming that it had not received the merchandise; that petitioner
also demanded the return of the merchandise or their value from
Allied Brokerage and Negros Navigation, but both denied any
liability.
In its Answer, Sambok, Bacolod, denied having received from
petitioner or from any of its co-defendants, the automotive products
referred to in the Complaint, and professed no knowledge of having
ordered from petitioner said articles.
Upon a Joint Motion to Dismiss filed by petitioner and Allied
Brokerage, the Trial Court, on October 23, 1975,

________________

1 Exhibit “6”, Deposition, Miguel Ng, p. 4.

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Chrysler Philippines Corp. vs. Court of Appeals

dismissed the case with prejudice against Allied Brokerage for lack
of cause of action, and also dismissed the latter’s counter-claim
against petitioner.
On July 31, 1978, the Trial Court rendered its Decision
dismissing the Complaint against Negros Navigation for lack of
cause of action, but finding Sambok, Bacolod, liable for the claim of
petitioner, thus:

“PREMISES CONSIDERED, the Court renders judgment as follows:

(1) The complaint against defendant Negros Navigation is dismissed

for lack of cause of action.
(2) Defendant Sambok Motors Co. (Bacolod) is ordered to pay plaintiff
Chrysler Philippines Corporation:

(a) The sum of Thirty-One Thousand Thirty Seven Pesos and Fifty Six
Centavos (P31,037.56) with interest at the rate of twelve percent
(12) per annum from January 1, 1971 until fully paid;
(b) The sum of Five Thousand Pesos as and for attorney’s fees and
expenses of litigation;
(c) The costs of the suit.

(3) The counterclaim of defendant Negros Navigation and Sambok

Motors Co. (Bacolod) are dismissed for lack of merit.”

The case against Negros Navigation was dismissed for failure of

petitioner and Sambok, Bacolod, to file the necessary2
notices and
claims as conditions precedent for a judicial action.
On the other hand, the Trial Court found that the act of Sambok,
Bacolod, “in refusing to take delivery of the shipment for no
justifiable reason from Negros Navigation despite having received
the Bill of Lading constituted wrongful neglect or refusal to accept
and pay for the subject shipment, by reason of which defendant
Sambok Motors may be held liable for damages.”
Sambok, Bacolod, appealed. On November 26, 1980, respondent
Appellate Court set aside the appealed judgment and

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2 CFI Decision, Rollo, p. 140.

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Chrysler Philippines Corp. vs. Court of Appeals

dismissed petitioner’s Complaint, after finding that the latter had not
performed its part of the obligation under the contract by not
delivering the goods at Sambok, Iloilo, the place designated in the
Parts Order Form (Exhibits “A”, “A-1” to “A-6”), and must,
therefore, suffer the loss. In other words, respondent Appellate Court
found that there was misdelivery.
Hence, this Petition for Review on Certiorari, with the following
errors assigned to respondent Court:

“I

“The Respondent Court of Appeals erred in finding that the issue of

misshipment or misdelivery of the automotive spare parts involved in the
litigation was raised by the private respondent Sambok Motors Co.
(Bacolod) in the Trial Court.

II

“The Respondent Court of Appeals erred in refusing to apply the

provisions of Section 18, Rule 46 of the Revised Rules of Court quoted
below, that since the question of misshipment or misdelivery was not raised
by the private respondent in the Trial Court, this issue cannot for the first
time be raised on appeal.

‘Section 18. Questions that may be raised on appeal.—Whether or not the appellant
has filed a motion for new trial in the court below, he may include in his assignment
of errors any question of law or fact that has been raised in the court below and
which is within the issues framed by the parties.’

III

“The Respondent Court of Appeals erred in finding that the private

respondent gave the alleged instruction to the petitioner to ship the
automotive spare parts to Iloilo City and not to Bacolod City.

IV

“The Respondent Court of Appeals erred in finding that the defendant

Negros Navigation notified the private respondent of the arrival of the
shipment at Bacolod City.

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Chrysler Philippines Corp. vs. Court of Appeals

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“The Respondent Court of Appeals erred in reversing the decision of the

Trial Court that the act of the private respondent in refusing to take delivery
of the automotive spare parts that it purchased from the petitioner after
having been notified of the shipment constitutes wrongful neglect resulting
in the loss of the cargo for which it should be liable in damages to the
petitioner.”

To our minds, the matter of misdelivery is not the decisive factor for
relieving Sambok, Bacolod, of liability herein. While it may be that
the Parts Order Form (Exhibits “A”, “A-1” to “A-6”) specifically
indicated Iloilo as the destination, as testified
3
to by Ernesto Ordonez,
Parts Sales Representative of petitioner, Sambok, Bacolod, and
Sambok, Iloilo, are actually one. In fact, admittedly, the order for
spare parts was made by the President of Sambok, Pepito Ng,
through its marketing consultant. Notwithstanding, upon receipt of
the Bill of Lading, Sambok, Bacolod, initiated, but did not pursue,
steps to take delivery as they were advised by Negros Navigation
that because some parts were missing, they 4
would just be informed
as soon as the missing parts were located.
It was only four years later, however, or in 1974, when a
warehouseman of Negros Navigation, Severino Aguarte, found in
their off-shore bodega, parts
5
of the shipment in question, but already
deteriorated and valueless.
Under the circumstances, Sambok, Bacolod, cannot be faulted for
not accepting or refusing to accept the shipment from Negros
Navigation four years after shipment. The evidence is clear that
Negros Navigation could not produce the merchandise nor ascertain
its whereabouts at the time Sambok, Bacolod, was ready to take
delivery. Where the seller delivers to the buyer a quantity 6
of goods
less than he contracted to sell, the buyer may reject them.
From the evidentiary record, Negros Navigation was the

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3 T.s.n., June 6, 1975, p. 581.

4 Folio of Exhibits, pp. 22-23, Deposition of Miguel Ng.
5 Rollo, pp. 136-137.
6 Article 1522, Civil Code.

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572 SUPREME COURT REPORTS ANNOTATED

Chua Peng Hian vs. Court of Appeals

party negligent in failing to deliver the complete shipment either to

Sambok, Bacolod, or to Sambok, Iloilo, but as the Trial Court found,
petitioner failed to comply with the conditions precedent to the filing
of a judicial action. Thus, in the last analysis, it is petitioner that

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must shoulder the resulting loss. The general rule that before
delivery, the risk of loss is borne by the seller who
7
is still the owner,
under the principle of “res perit domino”, is applicable in
petitioner’s case.
In sum, the judgment of respondent Appellate Court, will have to
be sustained not on the basis of misdelivery but on non-delivery
since the merchandise was never placed 8
in the control and
possession of Sambok, Bacolod, the vendee.
WHEREFORE, we hereby affirm the Decision of the then Court
of Appeals in CA-G.R. No. 65328-R, without pronouncement as to
costs.
SO ORDERED.

Teehankee (Chairman), Plana, Gutierrez, Jr. and De la

Fuente, JJ., concur.
Relova, J., no part.

Decision affirmed.

——o0o——

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