OCEJO, PEREZ & CO. vs. THE INTERNATIONAL BANKING CORPORATION - G.R. No. L-10658

OCEJO, PEREZ & CO. vs.

THE INTERNATIONAL BANKING CORPORATION

G.R. No. L-10658            February 14, 1918

Chua Teng Chong gave a promissory note to International Banking Corporation. 5000piculs of sugar, located in a warehouse in Calle Toneleros, was put up as security for the note. It seems that Ocejo, Perez and Co. entered into contract with Chua Teng Chong for the sale of some sugar. The sugar was brought to Manila and 5,000 piculs were delivered by to Chua Teng Chong whereupon it was stored in a warehouse at No. 119, Muelle de la Industria. The next day, petitioners attempted to collect the purchase price of the sugar, but the buyer refused to make payment. In the written contract between them, nothing was said concerning the time and place for payment. When the promissory note executed had fallen due and was unpaid, the bank made the effort to exercise active ownership over the sugar it discovered that the amount of sugar in his warehouse was less than the 5,000 piculs. Chua Teng Chong said that the rest of the sugar was in a warehouse at No. 119, Muelle de la Industria. The bank’s representatives then went to this warehouse and found some 3,200 piculs which they immediately seized, closing the warehouse with the bank's padlocks. Ocejo demand the bank to return the sugar, which the latter refused. Petitioners filed a complaint, with the bank as defendant, alleging that the bank was unlawfully holding the property of the plaintiff firm.

ISSUE:

Whether or not Chua Teng Chong failure to pay the purchase price authorize the seller to rescind the sale.

HELD:

Yes. There can be no doubt that the parties agreed in regard to the quantity of the sugar which the seller was to deliver and the price which the buyer was to pay, the contract was perfected. (Civil Code, Art. 1450.) It is also clear that the obligation of the seller to make delivery of the thing sold was not subject to the condition that the buyer was to pay the price before delivery. The sugar was delivered to the buyer. The seller delivered it into the buyer's warehouse, leaving it entirely subject to his control. Article 1462 of the Civil Code provides that the thing sold is deemed to be delivered "when it passes into the possession and control of the buyer." It is difficult to see how the seller could have divested himself more completely of the possession of the sugar, or how he could have placed it more completely under the control of the buyer. On the day following the delivery of the sugar the seller presented his bill to the buyer, but the latter failed and refused to make payment. The seller was entitled to demand payment of the sugar at any time after the delivery. No term having been stipulated within which the payment should be made, payment was demandable at the time and place of the delivery of the thing sold. (Civil Code, Art. 1500.)