Case Digest (G.R. No. L-8717)
Facts:
General Foods Corporation v. National Coconut Corporation, G.R. No. L-8717. November 20, 1956. The Supreme Court En Banc, Reyes, J.B.L., writing for the Court.Plaintiff-appellant General Foods Corporation (a Delaware corporation licensed in the Philippines) contracted with defendant-appellee National Coconut Corporation (created by Commonwealth Act No. 518 and later placed in liquidation by Executive Order No. 3727 on November 24, 1950) for the sale of copra. On September 23, 1947 the parties entered into a written contract (Contract No. RH-3551) for 1,500 long tons (later reduced to 1,000) of copra at a price quoted CIF New York at $164 (later reduced to $163) per ton of 2,000 pounds, with express provisions that payment would be based on “net landed weights” and that the balance of the price would be ascertained “upon outturn weights and quality at port of discharge.”
Between November 14 and December 3, 1947 NACOCO shipped 1,054.6278 short tons of copra on the S.S. Mindoro. The cargo in Manila was weighed by Luzon Brokerage Co., acting as agent for the General Superintendence Co., Ltd., by summing individual bag gross weights and subtracting an average tare derived from a sample of empty bags. Relying on those figures and on the shipping documents, NACOCO presented the required documents and drew 95% of the invoice value under appellant’s irrevocable letter of credit, receiving $136,686.95.
Upon arrival in New York, appellant reweighed the cargo and found only 898.792 short tons. After deducting $8,092.02 recovered from insurance for copra lost or destroyed prior to loading, appellant demanded reimbursement of $24,154.59 for the deficiency. An officer of NACOCO, Jose Nieva, Sr., acknowledged liability in a letter and promised payment, but NACOCO was later abolished and placed in liquidation. Appellant submitted its claim to the Board of Liquidators, which denied it.
Appellant then sued in the Court of First Instance of Manila to recover $24,154.59 (plus a 17% exchange/ excise tax under Republic Act No. 529 allegedly r...(Subscriber-Only)
Issues:
- Under a contract quoted CIF New York but expressly providing that “net landed weights” and outturn at port of discharge shall govern payment, did NACOCO remain liable for the shortage found on reweighing in New York?
- Did NACOCO’s drawing of 95% of the invoice value under the buyer’s irrevocable letter of credit constitute full payment so that no balance could be later ascertained or recovered by the buyer?
- Is appellant entitled to recover the 17% excise/exchange tax (under Republic Act No. 529) allegedly necess...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)