Case Digest (G.R. No. L-21979)
Facts:
National Marketing Corporation v. Alto Trading Development Corporation and The Alto Surety & Insurance Co., Inc., G.R. No. L-21979, September 29, 1967, the Supreme Court En Banc, Fernando, J., writing for the Court. The action originated with the Philippine Relief and Trade Rehabilitation Administration (Pratra), whose rights were later succeeded by National Marketing Corporation (plaintiff-appellant). On July 21, 1948, Alto Trading Development Corporation (referred to in the record and opinion as "Atlas") offered to sell 8,000 metric tons of galvanized steel sheets at U.S. $247 per ton CIF Manila; on July 24, 1948 the plaintiff placed an order conditioned on the seller furnishing a P100,000 performance bond; and on August (either 5 or 21) a purchase-sale contract was executed under which Atlas, as sales broker for West India Commercial Corp. of New York, obligated to sell the goods and to have a P100,000 bond with Alto Surety & Insurance Co., Inc. (Alto) as surety. On August 26, 1948 the plaintiff caused a letter of credit for U.S. $1,976,000 to be opened in favor of West India Commercial Corp.No deliveries of the galvanized sheets were ever made. Plaintiff sued for liquidated damages equal to 20% of the contract value (U.S. $395,200 or P790,400) and sought P100,000 under the performance bond. Atlas’ answer admitted its role as sales broker for West India, alleged the contract date and terms varied (noting an August 20 modification and an August 21 execution), and asserted that discrepancies in the letter of credit prevented its beneficiary, West India, from utilizing it and rendered delivery impossible; Atlas also pleaded special defenses and counterclaimed for P100,000. Alto denied personal liability, asserting that its bond was given for West India and that any obligation was accessory to and dependent upon West India’s liability.
After trial the lower court, in a decision promulgated July 29, 1962, dismissed the complaint. The trial court found Atlas acted as agent/broker for West India and was not directly liable; it further found a material discrepancy in the letter of credit (no 60‑day grace for shipment) which, together with pl...(Pro-only)
Issues:
- Did liability for non-delivery of the galvanized sheets arise under the purchase-sale contract and related instruments?
- If liability arose, could Atlas (the broker) and Alto (the surety) be held liable t...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)