Case Digest (G.R. No. L-13525)
Facts:
Far East International Import and Export Corporation v. Nankai Kogyo Co., Ltd., G.R. No. L-13525, November 30, 1962, the Supreme Court En Banc, Paredes, J., writing for the Court.The plaintiff-appellee Far East International Import & Export Corporation (Far East), a Philippine corporation, contracted on December 26, 1956 to sell approximately 5,000 metric tons (±10%) of steel scrap to the foreign defendant Nankai Kogyo Co., Ltd. (Nankai), a Japanese corporation. The written contract provided for payment by an irrevocable, without-recourse letter of credit for US$312,500 to be opened in Manila, conditions for drawing against shipment documents, a force majeure clause (par. 13) excusing nonperformance where government restrictions prevent export, and an arbitration clause (par. 14) stating that a Board of Arbitration "may" be formed in Japan and its decision would be final and binding.
After Nankai opened Letter of Credit No. 38/80049 through Nippon Kangyo, Tokyo with the China Banking Corporation, three vessels arrived in the Philippines by March 15, 1957. The Far East export license expired on March 19, 1957. Only 1,058.6 metric tons were loaded aboard the SS Mina in Manila; the other two vessels (Poro Point and Tacloban) were either unloaded or sailed without cargo when the government (after a change in administration) refused to extend the export license. Nankai acknowledged receipt of the 1,058.6 metric tons on April 27, 1957 but claimed damages for dead freight, demurrage and related costs.
Far East repeatedly requested a complete set of negotiable bills of lading to draw under the letter of credit; Everett Steamship Corporation answered that the bill of lading had been issued and signed in Tokyo at the charterer's request and refused to surrender it. On May 16, 1957 Far East sued for specific performance, recovery of the price, damages, and injunctive relief ordering Nankai and the steamship company to issue bills of lading and enjoining the China Banking Corporation and Nankai to maintain the letter of credit. The trial court issued an ex parte preliminary mandatory injunction on May 17, 1957 after plaintiff posted bond.
Nankai made a special appearance and moved to dismiss for lack of jurisdiction over person and subject matter and for failure to state a cause of action; Far East opposed. Plaintiff moved to file an amended complaint (adding allegations that Nankai was doing business in the Philippines through representatives at Luneta Hotel and seeking the price of the scrap), which was at first denied but later ordered admitted on August 20, 1957; Nankai answered on September 30, 1957. The trial proceeded with testimony from Far East and witnesses for Everett and China Banking Corp.; Nankai presented witnesses denying a Philippine office and contending plaintiff was not the real party in interest.
The trial court found that the failure to complete shipment was due to Philippine government intervention beyond plaintiff's control (intoning the contract's force majeure clause), absolved Everett and China Banking Corporation of liability, denied claims for damages (actual and moral), and rendered judgment for Far East against Nankai for US$67,710.50 (or its peso equivalent), leg...(Pro-only)
Issues:
- Did the trial court acquire jurisdiction over the person of defendant-appellant Nankai Kogyo Co., Ltd. and over the subject-matter of the action?
- Was the lower court's judgment awarding the purchase price (and ancillary relief) to Far East proper, given the partial shipment and the asserted force maje...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)