Aerospace Chemical Industries Inc

AEROSPACE CHEMICAL INDUSTRIES INC. VS. CA, PH Phosphate Fertilizer, Corp.
(Rivera)
FACTS:
1. On June 27, 1986, petitioner Aerospace Industries, Inc. (Aerospace) purchased five hundred metric
tons of sulfuric acid from private respondent Philippine Phosphate Fertilizer Corporation (Philphos).
Initially set beginning July 1986, the agreement provided that the buyer shall pay its purchases in
equivalent PH currency value, five days prior to the shipment date. Petitioner agreed to secure the
means of transport to pick-up the sulfuric acid from private respondents' loadports in Basay, Negros
Oriental and Sangi, Cebu.
2. On October 3, 1986, petitioner paid the purchased price of 500 MT of sulfuric acid. Then, it
chartered M/T Sultan Kayumanggi to carry the agreed volumes of freight from designated loading
areas. But the vessel was able to withdraw a partial amount of sulfuric acid from Basay and Sangi
because it tilted. And later, it sank with a total amount of 227.51 MT of sulfuric acid on board.
Petitioner sent a demand letter to private respondent for delivery of the 272.49 MT of sulfuric acid.
3. On December 1986, M/T Sultan Kayumanggi docked at Sangi, Cebu, but withdrew only 157.51 MT
of sulfuric acid. Again, the vessel tilted. Further loading was aborted. Two survey reports conducted
by the Societe Generale de Surveillance attested to these occurrences. Further vessels san sulfuric
acid on board on a date not specified.
4. On January 26 and March 20, 1987, Melecio Hernandez, acting for petitioner, addressed demand
letters to private respondent, concerning additional orders of sulfuric acid to replace its sunken
purchases.
5. Petitioner then filed a complaint against private respondent for specific performance and/or
damages before the Regional Trial Court of Pasig. The private respondent filed an answer with
counterclaim and alleged that it was the petitioner which was remiss in the performance of
its obligation in arranging the shipping requirements of its purchases and, hence, should pay damages.
The TC favoured the petitioner. However, on appeal, the Court of Appeals reversed the decision of the
trial court and instead found petitioner guilty of delay and therefore, liable for damages.
ISSUE: W/N the respondent court err in awarding damages to private respondent?
RULING:
No. Respondent court did not err in awarding damages to private respondent. Where there has
been breach of contract by the buyer, the seller has a right of action for damages. Following this
rule, a cause of action of the seller for damages may arise where the buyer refuses to remove the
goods, such that buyer has to remove them.
Article 1170 of the CC provides: “Those who in the performance of their obligations are guilty of
fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable
for damages.” Delay begins from the time the oblige judicially or extrajudicially demands from the
obligor the performance of the obligation. Art. 1169 states: “Those obliged to deliver or to do
something incur in delay from the time the oblige judicially or extrajudicially demands from them
the fulfilment of their obligation.”
In order that the debtor may be in default, it is necessary that the following requisites be present:
(1) that the obligation be demandable and already liquidated;
(2) that the debtor delays performance;
(3) that the creditor requires the performance judicially or extrajudicially.
Records reveal that a tanker ship had to pick up sulfuric acid in Basay, then proceed to get the
remaining stocks in Sangi, Cebu. A period of three days appears to us reasonable for a vessel to
travel between Basay and Sangi. Logically, the computation of damages arising from the shipping
delay would then have to be from December 15, 1986, given said reasonable period after the
December 12th letter. More important, private respondent was forced to vacate Basay wharf only
on December 15th. Its Basay expenses incurred before December 15, 1986, were necessary and
regular business expenses for which the petitioner should not be obliged to pay.

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AEROSPACE CHEMICAL INDUSTRIES INC. VS. CA, PH Phosphate Fertilizer, Corp.

(1) that the obligation be demandable and already liquidated;

(2) that the debtor delays performance;

(3) that the creditor requires the performance judicially or extrajudicially.

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