Title
ADR Shipping Services, Inc. vs. Gallardo
Case
G.R. No. 134873
Decision Date
Sep 17, 2002
Gallardo paid P242,000 advance charter fee to ADR for MV Pacific Breeze, which failed to arrive on time. Gallardo canceled, demanded refund; courts ruled in his favor, denying ADR’s claims of novation or forfeiture.
Font Size:

Case Digest (G.R. No. 134873)

Facts:

  1. Parties Involved: Marcelino Gallardo, a timber concessionaire and log dealer operating as "Mar Gallardo Trading," entered into a charter agreement with ADR Shipping Services, Inc. (ADR) for the use of the MV Pacific Breeze to transport logs to Kaoshung, Taiwan.
  2. Agreement Details: Gallardo paid an advance charter fee of P242,000, which was 10% of the agreed charter fee. The MV Pacific Breeze was supposed to be ready to load by February 5, 1988.
  3. Breach of Contract: The vessel failed to arrive by the agreed date, prompting Gallardo to cancel the contract and demand a refund of the advance payment.
  4. Legal Action: Due to ADR's refusal to return the advance payment, Gallardo filed a case for sum of money and damages, which the Regional Trial Court (RTC) ruled in his favor, ordering ADR to refund the P242,000 plus interest and attorney’s fees.
  5. Appeal: The Court of Appeals affirmed the RTC’s decision, leading ADR to file a petition for review before the Supreme Court.

Issue:

  • (Unlock)

Ruling:

  • (Unlock)

Ratio:

  1. Contractual Obligations: ADR failed to fulfill its obligation to have the MV Pacific Breeze ready to load by February 5, 1988, as stipulated in the agreement.
  2. Ambiguity in Contract: Ambiguous terms in the charter agreement, specifically the "cancelling clause," were interpreted strictly against ADR, the drafter of the contract.
  3. No Consent to Takeover: The alleged takeover agreement by Stywood was not proven to be genuine or executed with Gallardo’s consent.
  4. No Novation: The February 11, 1988 charter agreement between ADR and Stywood did not constitute a novation of the original agreement with Gallardo.
  5. Damages and Interest: Gallardo was entitled to recover the advance payment with legal interest at 6% per annum from the filing of the complaint, as the amount arose from a contract of affreightment, not a loan or forbearance of money.
  6. Attorney’s Fees: The award of P20,000 as attorney’s fees was justified since Gallardo was compelled to litigate to protect his interests.


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.