Behn, Meyer & Co. vs. Yangco, 38 Phil.

602

Facts:
A contract for sale of bundle of drums of caustic soda was entered into agreement between the
Behn Meyer & Co. and Teodoro Yanco, the merchandise was shipped from point New York to
Manila It made a stop over in Penang, Malaysia which is under British rule which led to removal
of most of the drums which contained said chemical compound. Yanco refused to accept it, even
alternative options were not entertained by Yanco. The contract stated " C.I.F. Manila, pagadero
against delivery of the document. Yanco filed an action to seek damages arising from breach of
contract
Issue: Whether or not Petitioner shall bear the burden of loss?
Held: In case of delivery of goods via common carrier is that If the contract be silent as to the
person or mode by which the goods are to be sent, delivery by the vendor to a common carrier in
the usual and ordinary course of business, tranfers the property to the vendee. A specification in
a contract relative to the payment of freight can be taken to indicate the intention of the parties in
regard to the place of delivery.
If the buyer is to pay the freight, it is reasonable to suppose that he does so because the goods
become his at the point of shipment. On the other hand, if the seller is to pay the freight, the
inference is equally strong that the duty of the seller is to have the goods transported to their
ultimate destination and that title to property does not pass until the goods have reached their
destination.
The letters "c. i. f." found in British contracts stand for costs, insurance, and freight. They signify
that the price fixed covers not only the cost of the goods, but the expense of freight and insurance
to be paid by the seller (Ireland v. Livingston, L. R., 5 H. L., 395.) Our instant contract, in
addition to the letters "c. i. f.," has the word following, "Manila." Under such a contract, an
Australian case is authority for the proposition that no inference is permissible that a seller was
bound to deliver at the point of destination. (Bowden v. Little, 4 Comm. [Australia], The place of
delivery was Manila and plaintiff has not legally excused default in delivery of the specified
merchandise at that place.
Lao vs. CA, 325 SCRA 694
FACTS:
The Associated Anglo-American Tobacco Corporation entered into a “Contract of Sales Agent “
with Andres Lao. Under the contract, Lao agrees to sell cigarettes manufactured and shipped by
the corporation to his business address in Tacloban City. Lao would in turn remit the sales.
Esteban Co, the Vice president and general manager of the Corporation summoned Lao for
accounting. It was then established that there was Lao’s liability. Lao encountered difficulties in
complying with these obligations. The corporation sent Ngo Kheng to supervise Lao’s sales
operation. Ngo Kheng discovered that contrary to Lao’s allegation that he still
had huge collectibles from his customers, nothing was due the Corporation from Lao’s clients.
From then on, Lao no longer received shipments.
Lao brought a complaint for accounting and damages against the corporation. During the
pendency of the said civil case, Esteban co, representing the corporation as its new vice-president
filed an estafe case against Lao.
Without awaiting the termination of the criminal case, Lao lodged a complaint for
malicious prosecution. The court ruled in favor of Lao declaring that the estafa case was filed
without probable cause and with malice and orders the corporation and Esteban Co to jointly and
severally pay the Laos.
ISSUE: Can petitioner Co be held solidarily liable with the Corporation for whatever damages
would be imposed upon them?
HELD: NO. A perusal of Lao’s affidavit-complaint reveals that at the time he filed the same
petitioner Co was the vice-president of the Corporation. As a corporate officer, his power to bind
the Corporation as its agent must be sought from statute, charter, by-laws, a delegation of
authority to a corporate officer, or from the acts of the board of directors formally expressed or
implied from a habit or custom of doing business. In this case, no such sources of petitioner’s
authority from which to deduce whether or not he was acting beyond the scope of his
responsibilities as corporate vice-president are mentioned, much less proven. It is thus logical to
conclude that the board of directors or by-laws of the corporation vested petitioner Co with
certain executive duties one of which is a case for the Corporation.
That petitioner Co was authorized to institute the estafa case is buttressed by the fact that the
Corporation failed to make an issue out of his authority to file the case. Upon well-established
principles of pleading, lack of authority of an officer of a corporation to bind it by contract
executed by him in its name, is a defense which should have been specially pleaded by the
corporation.

The Corporation’s failure to interpose such a defense could only mean that the filing of the
affidavit-complaint by petitioner Co was with the consent and authority of the Corporation. In
the same vein, petitioner Co may not be held personally liable for acts performed in pursuance of
an authority and therefore, holding him solidarily liable with the Corporation for the damages
awarded to respondent Lao does accord with law and jurisprudence.

Vda. De Mistica vs. Naguiat,

FACTS:
Eulalio Mistica, predecessor-in-interest of herein petitioner, is the owner of a parcel of
land, a portion thereof was leased to respondent Bernardino Naguiat. The two thereafter entered
into a contract to sell over the subject property. Pursuant to said agreement, respondent gave a
downpayment and made another partial payment, however, he failed to make any payments
thereafter. Eulalio Mistica died and was survived by his wife, the petitioner who then filed a
complaint for rescission alleging that that the failure and refusal of respondents to pay the
balance of the purchase price constitutes a violation of the contract which entitles her to rescind
the same; that respondents have been in possession of the subject portion and they should be
ordered to vacate and surrender possession of the same to petitioner.
Respondents contended that the contract cannot be rescinded on the ground that it clearly
stipulates that in case of failure to pay the balance as stipulated, a yearly interest of 12% is to be
paid.
Respondent Bernardino Naguiat likewise alleged that sometime during the wake of the
late Eulalio Mistica, he offered to pay the remaining balance to petitioner but the latter refused
and hence, there is no breach or violation committed by them and no damages could yet be
incurred by the late Eulalio Mistica, his heirs or assigns pursuant to the said document.
The lower court disallowed the rescission which the CA affirmed. Hence, the petition.
ISSUE: Whether petitioner is entitled to rescind the contract.
RULING: No, petitioner cannot rescind the contract. The transaction between Eulalio Mistica
and respondents, as evidenced by the Kasulatan, was clearly a Contract of Sale. A deed of sale is
considered absolute in nature when there is neither a stipulation in the deed that title to the
property sold is reserved to the seller until the full payment of the price; nor a stipulation giving
the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a
fixed period. In a contract of sale, the remedy of an unpaid seller is either specific performance
or rescission.
Under Article 1191 of the Civil Code, the right to rescind an obligation is predicated on the
violation of the reciprocity between parties, brought about by a breach of faith by one of them.
Rescission, however, is allowed only where the breach is substantial and fundamental to the
fulfillment of the obligation.
 In the present case, the failure of respondents to pay the balance of the purchase price
within ten years from the execution of the Deed did not amount to a substantial breach. In the
Kasulatan, it was stipulated that payment could be made even after ten years from the execution
of the Contract, provided the vendee paid 12 percent interest. The stipulations of the contract
constitute the law between the parties; thus, courts have no alternative but to enforce them as
agreed upon and written.
Moreover, it is undisputed that during the ten-year period, petitioner and her deceased husband
never made any demand for the balance of the purchase price. Petitioner even refused the
payment tendered by respondents during her husbands funeral, thus showing that she was not
exactly blameless for the lapse of the ten-year period. Had she accepted the tender, payment
would have been made well within the agreed period.