G.R. No. 176868 - Solar Harvest, Inc. vs. Davao Corrugated Carton Corp.

In the first quarter of 1998, petitioner Solar Harvest, Inc. (Solar Harvest) and respondent Davao Corrugated Carton Corporation (Davao Corrugated) entered into an oral agreement for the manufacture and sale of 36,500 corrugated carton boxes at US$1.10 each, to be used in exporting fresh bananas.
On March 31, 1998, Solar Harvest deposited US$40,150.00 in respondent’s US Dollar Savings Account at Westmont Bank as full pre-payment for the boxes. No written contract was executed.
Despite payment, Solar Harvest received no boxes.

On January 3, 2001, Solar Harvest sent a demand letter seeking reimbursement of the US$40,150.00.
On February 19, 2001, Davao Corrugated replied:

Stated that production of the 36,500 boxes was completed on April 3, 1998 and that Solar Harvest failed to pick them up within the agreed 30-day period.
Claimed an additional order of 24,000 boxes, of which 14,000 were allegedly produced without pre-payment.
Demanded removal of the boxes, payment of US$15,400.00 for the unpaid 14,000 boxes, and P132,000.00 storage fee.

On August 17, 2001, Solar Harvest filed a complaint for sum of money and damages, alleging breach for failure to deliver within 30 days, repeated follow-ups, cancellation of the order, and refusal to refund.
In its answer and counterclaim, Davao Corrugated:

Denied breach, asserted production was complete, and insisted Solar Harvest failed to pick up the boxes due to a delayed shipping vessel.
Sought US$15,400.00 plus interest, storage fees, moral and exemplary damages, attorney’s fees, and costs.

He paid the deposit by phone instructions but only saw unlabeled sample boxes during plant visits.
He followed up production and ultimately canceled the order due to shipping delays; denied any second order of 24,000 boxes.

Bienvenido Estanislao confirmed two inspections (October 1998, February 2000) where samples were taken from a stockpile of boxes.
President Jaime Tan testified production of 36,500 boxes was completed on April 3, 1998; a second order of 24,000 was placed; Solar Harvest was to pick up from warehouse; 5,000 boxes sold as rejects at P20 each for P100,000.

RTC (March 2, 2004) held no breach: boxes were produced, non-delivery due to petitioner’s failure to pick up; dismissed complaint and counterclaim.
CA (September 21, 2006) affirmed: petitioner failed to prove the delivery terms and never demanded delivery; denied appeal.
CA resolved petitioner’s motion for reconsideration on February 23, 2007, likewise denying relief.

Petitioner filed a petition for review under Rule 45, arguing respondent did not complete manufacturing and was obligated to deliver to TADECO.
Respondent maintained boxes exist in its warehouse and prayed for petitioner’s removal obligation.

Whether petitioner established a cause of action for rescission (resolution) of contract and reimbursement under Civil Code Article 1191.
Whether respondent was in default or delay in producing and delivering the boxes, considering the absence of a written agreement and the requirement of demand under Article 1169.
Whether petitioner proved the alleged delivery terms (i.e., delivery within 30 days to TADECO) sufficient to bind respondent.
Whether the factual findings of production and non-pickup by petitioner are reviewable in a Rule 45 petition.