Case Digest (G.R. No. 30003)
Facts:
C. Stilianopulos & Co. v. Manila Trading & Supply Co., G.R. No. 30003, February 27, 1929, the Supreme Court (En Banc), Johns, J., writing for the Court.The plaintiff-appellant, C. Stilianopulos & Co., and the defendant-appellee, Manila Trading & Supply Co., executed a service/agency agreement (referred to in the record as Exhibit B) dated February 14, 1924, under which the parties arranged for the sale of Ford automobiles and parts. The contract required approval by the Ford Motor Company to become effective and contained clauses addressing cancellation, unfilled orders, and assignment.
A dispute arose when the defendant gave written notice cancelling the agreement in 1925. The plaintiff sued for damages, arguing that the contract prohibited cancellation except upon prior approval of the Ford Motor Company, and therefore the defendant’s purported rescission without such prior approval was null and rendered the defendant liable for lost profits and other damages. The defendant answered that Clause 7 of Exhibit B allowed either party to cancel "with or without cause" if approved by Ford, and that prior approval was not required; alternatively, the defendant contended it had in fact obtained Ford’s approval, first verbally and subsequently in writing.
At trial the court considered the language of clauses dealing with (1) effectiveness of the contract (approval by Ford to be endorsed on the agreement), (2) cancellation by either party "with or without cause, if approved by the Ford Motor Company," (3) cancellation as to unfilled orders, and (4) restriction on assignment without dealer and Ford approval. The trial court concluded that the phrase "if approved by the Ford Motor Company" did not create a condition precedent to cancellation and that Ford had approved the defendant’s cancellation both verbally and later in writing (recording an instrument signed by R. I. Roberge, Assistant Manager of Sales of Ford). The trial court therefore dismissed the plaintiff’s action; it also held that, because the contract contained no fixed term, either part...(Subscriber-Only)
Issues:
- Does the phrase "if approved by the Ford Motor Company" in Clause 7 of the service agreement constitute a condition precedent requiring prior approval before the defendant may cancel the contract?
- If prior approval were required, did the defendant obtain approval of the Ford Motor Company such that the ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)