Chrysler Philippines Corp. v. Court of Appeals

Facts:

Petitioner is a domestic corporation engaged in the assembling and sale of motor vehicles and other automotive products. Respondent Sambok Motors Co., a general partnership, during the period relevant to these proceedings, was its dealer for automotive products with offices at Bacolod (Sambok, Bacolod) and Iloilo (Sambok, Iloilo).

On October 2, 1970, Sambok, Bacolod, ordered from petitioner various automotive products worth P30,909.61, payable in 45 days; that on November 25, 1970, petitioner delivered said products to its forwarding agent, Allied Brokerage Corporation, for shipment; that Allied Brokerage loaded the goods on board the M/S Doña Florentina, a vessel owned and operated by Negros Navigation Company, for delivery to Sambok, Bacolod; that when petitioner tried to collect from the latter the amount of P31,037.56, representing the price of the spare parts plus handling charges, Sambok, Bacolod, refused to pay claiming that it had not received the merchandise; that petitioner also demanded the return of the merchandise or their value from Allied Brokerage and Negros Navigation, but both denied any liability.In its Answer, Sambok, Bacolod, denied having received from petitioner or from any of its co-defendants, the automotive products referred to in the Complaint, and professed no knowledge of having ordered from petitioner said articles.

Issue:

WON Sambok Bacolod bears the loss of the cargo for which it is liable in damages to Chrysler.

Held:

No, Sambok Bacolod cannot be faulted for not accepting or refusing to accept the shipment from Negros Navigation four years after shipment.

It was found out that upon receipt of the Bill of Lading, Sambok Bacolod initiated, but did not pursue stepts to take delivery as they were advised by Negros Navigation that because some party were missing, they would just be informed as soon as the missing parts were located. It was only four years later that the said parts were found in their off-shore bodega but were already deteriorated and valueless.The evidence is clear that Negros Navigation could not produce the merchandise nor ascertain its whereabouts at the time Sambok, Bacolod, was ready to take delivery. Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them.

From the evidentiary record, Negros Navigation was the party negligent in failing to deliver the complete shipment either to Sambok, Bacolod, or to Sambok, Iloilo, but as the Trial Court found, petitioner failed to comply with the conditions precedent to the filing of a judicial action. Thus, in the last analysis, it is petitioner that must shoulder the resulting loss. The general rule that before, delivery, the risk of loss is home by the seller who is still the owner, under the principle of "res petit domino", is applicable in petitioner's case.

In sum, the judgment of respondent Appellate Court, will have to be sustained not on the basis of misdelivery but on non-delivery since the merchandise was never placed in the control and possession of Sambok, Bacolod, the vendee.