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This document is a Supreme Court ruling regarding a breach of contract case between M.D. Taylor and Tan Liuan & Company. The key points are:
1) Taylor had contracted to work for Tan Liuan & Company to establish an oil factory, but the machinery never arrived in Manila within the agreed upon 6 months.
2) The contract allowed Tan Liuan to cancel if the machinery failed to arrive for any reason within 6 months, which they then did.
3) Taylor sued for breach of contract, arguing the cancellation clause only applied if machinery delay was outside Tan Liuan's control.
4) The Supreme Court ruled the cancellation clause was legal and enforceable as written, allowing Tan Li
This document is a Supreme Court ruling regarding a breach of contract case between M.D. Taylor and Tan Liuan & Company. The key points are:
1) Taylor had contracted to work for Tan Liuan & Company to establish an oil factory, but the machinery never arrived in Manila within the agreed upon 6 months.
2) The contract allowed Tan Liuan to cancel if the machinery failed to arrive for any reason within 6 months, which they then did.
3) Taylor sued for breach of contract, arguing the cancellation clause only applied if machinery delay was outside Tan Liuan's control.
4) The Supreme Court ruled the cancellation clause was legal and enforceable as written, allowing Tan Li
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This document is a Supreme Court ruling regarding a breach of contract case between M.D. Taylor and Tan Liuan & Company. The key points are:
1) Taylor had contracted to work for Tan Liuan & Company to establish an oil factory, but the machinery never arrived in Manila within the agreed upon 6 months.
2) The contract allowed Tan Liuan to cancel if the machinery failed to arrive for any reason within 6 months, which they then did.
3) Taylor sued for breach of contract, arguing the cancellation clause only applied if machinery delay was outside Tan Liuan's control.
4) The Supreme Court ruled the cancellation clause was legal and enforceable as written, allowing Tan Li
Drepturi de autor:
Attribution Non-Commercial (BY-NC)
Formate disponibile
Descărcați ca DOCX, PDF, TXT sau citiți online pe Scribd
arrive in the city of Manila within the six months SUPREME COURT succeeding the making of the contract; nor was Manila other equipment necessary for the establishment of EN BANC the factory at any time provided by the defendants. G.R. No. L-16109 October 2, 1922 The reason for this does not appear with certainty, but a preponderance of the evidence is to the effect M. D. TAYLOR, plaintiff-appellant, that the defendants, in the first months of 1919, vs. seeing that the oil business no longer promised UY TIENG PIAO and TAN LIUAN, doing business large returns, either cancelled the order for the under the firm name and style of Tan Liuan & machinery from choice or were unable to supply the Company, defendants. capital necessary to finance the project. At any rate Uy TIENG PIAO, defendant-appellant. on June 28, 1919, availing themselves in part of the Cohn, Fisher and DeWitt and William C. Brady for option given in the clause above quoted, the plaintiff-appellant. defendants communicated in writing to the plaintiff Gabriel La O for defendant-appellant Uy Tieng Piao. the fact that they had decided to rescind the Crossfield and O'Brien for Tan Liuan and Tan Liyan contract, effective June 30th then current, upon and Co. which date he was discharged. The plaintiff thereupon instituted this action to recover damages in the amount of P13,000, covering salary and STREET, J.: perquisites due and to become due under the contract. This case comes by appeal from the Court of First Instance of the city of Manila, in a case where The case for the plaintiff proceeds on the idea the court awarded to the plaintiff the sum of P300, that the stipulation above quoted, giving to the as damages for breach of contract. The plaintiff defendants the right to cancel the contract upon the appeals on the ground that the amount of damages contingency of the nonarrival of the machinery in awarded is inadequate; while the defendant Uy Manila within six months, must be understood as Tieng Piao appeals on the ground that he is not applicable only in those cases where such nonarrival liable at all. The judgment having been heretofore is due to causes not having their origin in the will or affirmed by us in a brief opinion, we now avail act of the defendants, as delays caused by strikes or ourselves of the occasion of the filing of a motion to unfavorable conditions of transporting by land or rehear by the attorneys for the plaintiff to modify sea; and it is urged that the right to cancel cannot the judgment in a slight measure and to state more be admitted unless the defendants affirmatively fully the reasons underlying our decision. show that the failure of the machinery to arrive was due to causes of that character, and that it did not It appears that on December 12, 1918, the have its origin in their own act or volition. In this plaintiff contracted his services to Tan Liuan and connection the plaintiff relies on article 1256 of the Co., as superintendent of an oil factory which the Civil Code, which is to the effect that the validity latter contemplated establishing in this city. The and fulfillment of contracts cannot be left to the will period of the contract extended over two years from of one of the contracting parties, and to article the date mentioned; and the salary was to be at the 1119, which says that a condition shall be deemed rate of P600 per month during the first year and fulfilled if the obligor intentially impedes its P700 per month during the second, with electric fulfillment. light and water for domestic consumption, and a residence to live in, or in lieu thereof P60 per month. It will be noted that the language conferring the right of cancellation upon the defendants is At the time this agreement was made the broad enough to cover any case of the nonarrival of machinery for the contemplated factory had not the machinery, due to whatever cause; and the been acquired, though ten expellers had been stress in the expression "for any reason" should ordered from the United States; and among the evidently fall upon the word "any." It must follow of stipulations inserted in the contract with the plaintiff necessity that the defendants had the right to was a provision to the following effect: cancel the contract in the contingency that It is understood and agreed that occurred, unless some clear and sufficient reason should the machinery to be installed in the can be adduced for limiting the operation of the said factory fail, for any reason, to arrive in words conferring the right of cancellation. Upon this the city of Manila within a period of six point it is our opinion that the language used in the months from date hereof, this contract may stipulation should be given effect in its ordinary be cancelled by the party of the second part sense, without technicality or circumvention; and in at its option, such cancellation, however, not this sense it is believed that the parties to the to occur before the expiration of such six contract must have understood it. months. Article 1256 of the Civil Code in our opinion the contrary apparently suffers from the logical creates no impediment to the insertion in a contract defect of assuming the very point at issue. for personal service of a resolutory condition But it will be said that the question is not so permitting the cancellation of the contract by one of much one concerning the legality of the clause the parties. Such a stipulation, as can be readily referred to as one concerning the interpretation of seen, does not make either the validity or the the resolutory clause as written, the idea being that fulfillment of the contract dependent upon the will of the court should adjust its interpretation of said the party to whom is conceded the privilege of clause to the supposed precepts of article 1256, by cancellation; for where the contracting parties have restricting its operation exclusively to cases where agreed that such option shall exist, the exercise of the nonarrival of the machinery may be due to the option is as much in the fulfillment of the extraneous causes not referable to the will or act of contract as any other act which may have been the the defendants. But even when the question is subject of agreement. Indeed, the cancellation of a viewed in this aspect their result is the same, contract in accordance with conditions agreed upon because the argument for the restrictive beforehands is fulfillment. interpretation evidently proceeds on the assumption In this connection, we note that the that the clause in question is illegal in so far as it commentator Manresa has the following observation purports to concede to the defendants the broad with respect to article 1256 of the Civil Code. Says right to cancel the contract upon nonarrival of the he: "It is entirely licit to leave fulfillment to the will machinery due to any cause; and the debate returns of either of the parties in the negative form of again to the point whether in a contract for the rescission, a case frequent in certain contracts (the prestation of service it is lawful for the parties to letting of service for hire, the supplying of electrical insert a provision giving to the employer the power energy, etc.), for in such supposed case neither is to cancel the contract in a contingency which may the article infringed, nor is there any lack of equality be dominated by himself. Upon this point what has between the persons contracting, since they remain already been said must suffice. with the same faculties in respect to fulfillment." As we view the case, there is nothing in (Manresa, 2d ed., vol. 8, p. 610.) 1awph!l.net article 1256 which makes it necessary for us to warp Undoubtedly one of the consequences of this the language used by the parties from its natural stipulation was that the employers were left in a meaning and thereby in legal effect to restrict the position where they could dominate the words "for any reason," as used in the contract, to contingency, and the result was about the same as mean "for any reason not having its origin in the will if they had been given an unqualified option to or acts of the defendants." To impose this dispense with the services of the plaintiff at the end interpretation upon those words would in our of six months. But this circumstance does not make opinion constitute an unjustifiable invasion of the the stipulation illegal. power of the parties to establish the terms which they deem advisable, a right which is expressed in The case of Hall vs. Hardaker (61 Fla., 267) article 1255 of the Civil Code and constitutes one of cited by the appellant Taylor, though superficially the most fundamental conceptions of contract right somewhat analogous, is not precisely in point. In enshrined in the Code. that case one Hardaker had contracted to render competent and efficient service as manager of a The view already expressed with regard to corporation, to which position it was understood he the legality and interpretation of the clause under was to be appointed. In the same contract it was consideration disposes in a great measure of the stipulated that if "for any reason" Hardaker should argument of the appellant in so far as the same is not be given that position, or if he should not be based on article 1119 of the Civil Code. This permitted to act in that capacity for a stated period, provision supposes a case where the obligor certain things would be done by Hall. Upon being intentionally impedes the fulfillment of a condition installed in the position aforesaid, Hardaker failed to which would entitle the obligee to exact render efficient service and was discharged. It was performance from the obligor; and an assumption held that Hall was released from the obligation to do underlying the provision is that the obligor prevents the things that he had agreed to perform. Some of the obligee from performing some act which the the judges appear to have thought that the case obligee is entitled to perform as a condition turned on the meaning of the phrase "for any precedent to the exaction of what is due to him. reason," and the familiar maxim was cited that no Such an act must be considered unwarranted and man shall take advantage of his own wrong. The unlawful, involving per se a breach of the implied result of the case must have been the same from terms of the contract. The article can have no whatever point of view, as there was an admitted application to an external contingency which, like failure on the part of Hardaker to render competent that involved in this case, is lawfully within the service. In the present case there was no breach of control of the obligor. contract by the defendants; and the argument to In Spanish jurisprudence a condition like that here under discussion is designated by Manresa a facultative condition (vol. 8, p. 611), and we gather from his comment on articles 1115 and 1119 of the Civil Code that a condition, facultative as to the debtor, is obnoxious to the first sentence contained in article 1115 and renders the whole obligation void (vol. 8, p. 131). That statement is no doubt correct in the sense intended by the learned author, but it must be remembered that he evidently has in mind the suspensive condition, such as is contemplated in article 1115. Said article can have no application to the resolutory condition, the validity of which is recognized in article 1113 of the Civil Code. In other words, a condition at once facultative and resolutory may be valid even though the condition is made to depend upon the will of the obligor. If it were apparent, or could be demonstrated, that the defendants were under a positive obligation to cause the machinery to arrive in Manila, they would of course be liable, in the absence of affirmative proof showing that the nonarrival of the machinery was due to some cause not having its origin in their own act or will. The contract, however, expresses no such positive obligation, and its existence cannot be implied in the fact of stipulation, defining the conditions under which the defendants can cancel the contract. Our conclusion is that the Court of First Instance committed no error in rejecting the plaintiff's claim in so far as damages are sought for the period subsequent to the expiration of the first six months, but in assessing the damages due for the six-month period, the trial judge evidently overlooked the item of P60, specified in the plaintiff's fourth assignment of error, which represents commutation of house rent for the month of June, 1919. This amount the plaintiff is clearly entitled to recover, in addition to the P300 awarded in the court below. We note that Uy Tieng Piao, who is sued as a partner with Tan Liuan, appealed from the judgment holding him liable as a member of the firm of Tan Liuan and Co.; and it is insisted in his behalf that he was not bound by the act of Tan Liuan as manager of Tan Liuan and Co. in employing the plaintiff. Upon this we will merely say that the conclusion stated by the trial court in the next to the last paragraph of the decision with respect to the liability of this appellant in our opinion in conformity with the law and facts. The judgment appealed from will be modified by declaring that the defendants shall pay to the plaintiff the sum of P360, instead of P300, as allowed by the lower court, and as thus modified the judgment will be affirmed with interest from November 4, 1919, as provided in section 510 of the Code of Civil Procedure, and with costs. So ordered. Araullo, C.J., Johnson, Malcolm, Avanceña, Villamor, Ostrand, Johns and Romualdez, JJ., concur.