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    Visayan Sawmill v. CA, 219 SCRA 3 78 (1993)

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    Rebuild Bohol
    The document summarizes a court case between Visayan Sawmill Company and RJH Trading regarding the sale of scrap iron. [1] The contract stipulated that RJH Trading would open an irrevocable letter of credit for $250,000 by May 15th. [2] RJH Trading opened a letter of credit on May 12th but it did not meet all the conditions of the contract. [3] The court ruled in favor of Visayan Sawmill Company, finding that the letter of credit opened by RJH Trading did not comply with the conditions of the contract, so the obligation of Visayan Sawmill Company to deliver the scrap iron did not arise.

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    Visayan Sawmill v. CA, 219 SCRA 3 78 (1993)

    Uploaded by

    Rebuild Bohol
    61 views2 pages
    The document summarizes a court case between Visayan Sawmill Company and RJH Trading regarding the sale of scrap iron. [1] The contract stipulated that RJH Trading would open an irrevocable letter of credit for $250,000 by May 15th. [2] RJH Trading opened a letter of credit on May 12th but it did not meet all the conditions of the contract. [3] The court ruled in favor of Visayan Sawmill Company, finding that the letter of credit opened by RJH Trading did not comply with the conditions of the contract, so the obligation of Visayan Sawmill Company to deliver the scrap iron did not arise.

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    140. Visayan Sawmill v. CA, 219 SCRA 3 78 (1993)

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    The document summarizes a court case between Visayan Sawmill Company and RJH Trading regarding the sale of scrap iron. [1] The contract stipulated that RJH Trading would open an irrevocable letter of credit for $250,000 by May 15th. [2] RJH Trading opened a letter of credit on May 12th but it did not meet all the conditions of the contract. [3] The court ruled in favor of Visayan Sawmill Company, finding that the letter of credit opened by RJH Trading did not comply with the conditions of the contract, so the obligation of Visayan Sawmill Company to deliver the scrap iron did not arise.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    61 views2 pages

    Visayan Sawmill v. CA, 219 SCRA 3 78 (1993)

    Uploaded by

    Rebuild Bohol
    The document summarizes a court case between Visayan Sawmill Company and RJH Trading regarding the sale of scrap iron. [1] The contract stipulated that RJH Trading would open an irrevocable letter of credit for $250,000 by May 15th. [2] RJH Trading opened a letter of credit on May 12th but it did not meet all the conditions of the contract. [3] The court ruled in favor of Visayan Sawmill Company, finding that the letter of credit opened by RJH Trading did not comply with the conditions of the contract, so the obligation of Visayan Sawmill Company to deliver the scrap iron did not arise.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    140. Visayan Sawmill v.

    CA, 219 SCRA 3 78 (1993)

    G.R. No. 83851. March 3, 1993.

    VISAYAN SAWMILL COMPANY, INC., and ANG TAY, petitioners, vs. THE
    HONORABLE COURT OF APPEALS and RJH TRADING, represented by RAMON
    J. HIBIONADA, proprietor, respondents.

    Saleto J. Erames and Edilberto V. Logronio for petitioners.

    Eugenio O. Original for private respondent.

    Doctrine:
     In a contract of sale, the non-payment of the price is a resolutory condition which
    extinguishes the transaction that, for a time, existed and discharges the obligations
    created thereunder. On the other hand, "the parties may stipulate that ownership in
    the thing shall not pass to the purchaser until he has fully paid the price." In such a
    contract to sell, the full payment of the price is a positive suspensive condition, such
    that in the event of non-payment, the obligation of the seller to deliver and transfer
    ownership never arises. Stated differently, in a contract to sell, ownership is not
    transferred upon delivery of property but upon full payment of the purchase price.
    Consequently, in a contract of sale, after delivery of the object of the contract has
    been made, the seller loses ownership and cannot recover the same unless the
    contract is rescinded. But in the contract to sell, the seller retains ownership and the
    buyer's failure to pay cannot even be considered a breach, whether casual or
    substantial, but an event that prevented the seller's duty to transfer title to the object
    of the contract.
    FACTS:

    On May 1, 1983, herein plaintiff-appellee and defendants appellants entered


    into a sale involving scrap iron, subject to the condition that plaintiff appellee will
    open a letter of credit in the amount of P250,00.00 in favor of defendant-appellant
    corporation on or before May 15, 1983. On May 24, 1983, plaintiff-appellee informed
    defendans-appellants by telegram that the letter of credit was opened May 12, 1983 at
    the BPI main office in Ayala, but that transmittal was delayed. On May 26, 1983,
    defendants-appellants received a letter advice from the Dumaguete City Branch of
    BPI dated May 26, 1983, that a domestic letter of credit had been opened in favor of
    Visayan Sawmill Company.

    On July 19, 1983 plaintiffs then demanded that defendants comply with the
    deed of sale. On July 20, 1983 defendant corporation informed plaintiff’s lawyer that
    it is unwilling to continue with the sale due to plaintiff’s failure to comply with the
    essential preconditions of the contract.

    Private respondent prayed for judgment ordering the petitioner corporation to


    comply with the contract by delivering to him the scrap iron subject thereof.
    ISSUE:

    Did petitioner corporation violate the terms and conditions of the contract?

    RULING:

    The petitioner corporation’s obligation to sell is unequivocally subject to a


    positive suspensive condition. The failure of the private respondent to comply with
    the positive suspensive condition cannot even be considered a breach – casual or
    serious – but simply an event that prevented the obligation of petitioner corporation
    to convey title from acquiring binding force.

    The letter of credit in favor of petitioner was indisputably not in accordance


    with the stipulation in the contract signed by the parties on at three counts: (1) it was
    not opened, made or indorsed by the private respondent, but by a corporation which
    is not a party to the contract; (2) it was not opened with the bank agreed upon and;
    (3) it is not irrevocable and unconditional, for it is without recourse, it is set to expire
    on a specific date and it stipulates certain conditions with respect to shipment.

    Consequently, the obligation of petitioner to sell did not arise; it therefore


    cannot be compelled by specific performance to comply with its prestation.

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