1. SMITH, BELL & CO., LTD., plaintiff-appellant, vs.

VICENTE SOTELO MATTI, defendant-

Facts:

In August, 1918, the plaintiff corporation and the defendant, Mr. Vicente Sotelo, entered into
contracts whereby the former obligated itself to sell, and the latter to purchase from it, two steel
tanks, for the total price of twenty-one thousand pesos (P21,000), the same to be shipped from
New York and delivered at Manila "within three or four months; two expellers at the price of
twenty five thousand pesos (P25,000) each, which were to be shipped from San Francisco in the
month of September, 1918, or as soon as possible; and two electric motors at the price of two
thousand pesos (P2,000) each, as to the delivery of which stipulation was made, couched in
these words: "Approximate delivery within ninety days. — This is not guaranteed."

The tanks arrived at Manila on the 27th of April, 1919: the expellers on the 26th of October, 1918;
and the motors on the 27th of February, 1919.

The plaintiff corporation notified the defendant, Mr. Sotelo, of the arrival of these goods, but Mr.
Sotelo refused to receive them and to pay the prices stipulated.

The plaintiff brought a suit alleging the failure of the defendant to receive and pay the goods
despite notice and further allege that the same were in good condition.

In their answer, Mr. Sotelo, and the intervenor, the Manila Oil Refining and By-Products Co., Inc.,
denied the plaintiff's allegations and that there was also delay in the notification of the arrival of
the tanks and the motors and the expellers arrived late and incomplete. Thus, as a consequence
of plaintiff’s delay in delivering goods which the intervenor intended to use for the manufacture of
coconut, he also claims for damages.

Trial Court Ruling

- Absolved the defendants from the complaint insofar as the tanks and the electric motors were
concerned, but rendered judgment against them, ordering them to "receive the aforesaid
expellers and pay the plaintiff the sum of fifty thousand pesos (P50,00), the price of the said
goods, with legal interest thereon from July 26, 1919

Both parties appealed the judgement

Issue:

Whether or not, under the contracts entered into and the circumstances established in the record,
the plaintiff has fulfilled, in due time, its obligation to bring the goods in question to Manila.

Ruling:
1. Determine first what period was period was fixed for the delivery of the goods

- Tanks

To be delivered within 3 or 4 months — The promise or indication of shipment carries with it

- Expellers

To be shipped at San Francisco within the month of September /18, or as soon as possible

- Motors

Approximate delivery within ninety days. — This is not guaranteed. — This sale is subject to our
being able to obtain Priority Certificate, subject to the United States Government requirements
and also subject to confirmation of manufactures.

In all these contracts, there is a final clause as follows:

The sellers are not responsible for delays caused by fires, riots on land or on the sea, strikes or
other causes known as "Force Majeure" entirely beyond the control of the sellers or their
representatives.

Under these stipulations, it cannot be said that any definite date was fixed for the delivery of the
goods. As to the tanks, the agreement was that the delivery was to be made "within 3 or 4
months," but that period was subject to the contingencies referred to in a subsequent clause. With
regard to the expellers, the contract says "within the month of September, 1918," but to this is
added "or as soon as possible." And with reference to the motors, the contract contains this
expression, "Approximate delivery within ninety days," but right after this, it is noted that "this is
not guaranteed."

The oral evidence falls short of fixing such period.

From the record it appears that these contracts were executed at the time of the world war when
there existed rigid restrictions on the export from the United States of articles like the machinery
in question, and maritime, as well as railroad, transportation was difficult, which fact was known to
the parties; hence clauses were inserted in the contracts, regarding "Government regulations,
railroad embargoes, lack of vessel space, the exigencies of the requirements of the United States
Government," in connection with the tanks and "Priority Certificate, subject to the United State
Government requirements," with respect to the motors. At the time of the execution of the
contracts, the parties were not unmindful of the contingency of the United States Government not
allowing the export of the goods, nor of the fact that the other foreseen circumstances therein
stated might prevent it.

Considering these contracts in the light of the civil law, we cannot but conclude that the term
which the parties attempted to fix is so uncertain that one cannot tell just whether, as a matter of
fact, those articles could be brought to Manila or not. If that is the case, as we think it is, the
obligations must be regarded as conditional.
Obligations for the performance of which a day certain has been fixed shall be demandable only
when the day arrives.

A day certain is understood to be one which must necessarily arrive, even though its date be
unknown.

If the uncertainty should consist in the arrival or non-arrival of the day, the obligation is conditional
and shall be governed by the rules of the next preceding section. (referring to pure and
conditional obligations). (Art. 1125, Civ. Code.)

And as the export of the machinery in question was, as stated in the contract, contingent upon the
sellers obtaining certificate of priority and permission of the United States Government, subject to
the rules and regulations, as well as to railroad embargoes, then the delivery was subject to a
condition the fulfillment of which depended not only upon the effort of the herein plaintiff,
but upon the will of third persons who could in no way be compelled to fulfill the
condition. In cases like this, which are not expressly provided for, but impliedly covered, by the
Civil Code, the obligor will be deemed to have sufficiently performed his part of the obligation, if
he has done all that was in his power, even if the condition has not been fulfilled in reality.

- The defendant Mr. Vicente Sotelo Matti, sentenced to accept and receive from the plaintiff the
tanks, the expellers and the motors in question, and to pay the plaintiff the sum of ninety-six
thousand pesos (P96,000), with legal interest thereon from July 17, 1919, the date of the
filing of the complaint, until fully paid, and the costs of both instances. So ordered