Special Issues in International

Law
Monday, October 19, 2015

National Power Corporation v. Philipp Brothers

Oceanic, Inc.

NATIONAL POWER CORPORATION VS. PHILIPP

BROTHERS OCEANIC, INC.

369 SCRA 629 (2001)

FACTS OF THE CASE

National Power Corporation (NAPOCOR) issued

invitations to bid for the supply and delivery of

120,000 metric tons of imported coal for its Batangas

Coal-Fired   Thermal Power Plant   of which   Philipp

Brothers Oceanic, Inc. (PHIBRO) bidded and was

accepted. 

On July 10, 1987,   PHIBRO told NAPOCOR

that   disputes might soon plague Australia that will

seriously hamper its ability to supply coal. On July 23

to July 31, 1987, PHIBRO informed NAPOCOR

that   unless a "strike-free" clause is incorporated in

the charter party or the contract of carriage, the ship

owners are unwilling to load their cargo. In order to

hasten the transfer of coal, they should share the

burden of the   "strike-free" clause but NAPOCOR

refused. 

PHIBRO effected its first shipment only on November

17, 1987 which was supposed to be on the 30th day

after receipt of the letter of credit of which it received

on August 6, 1987.

Consequently, In October 1987: NAPOCOR once more

advertised for the delivery of coal to its Calaca

thermal plant of which   PHIBRO applied but was

rejected since it was not able to satisfy the demand

for damages on its delay. PHIBRO filed for damages in

the RTC alleging that the rejection was tainted with

malice and bad faith.

After the trial, the trial court rendered a decision in

favor of PHIBRO, ordering the defendant NAPOCOR to

reinstate PHIBRO in the defendant National Power

Corporation’s list of accredited bidders and indemnify

the same actual, moral and exemplary damages. On

appeal, the CA affirmed in toto the decision of RTC.

ISSUE

Whether the Trial Court erred in awarding moral

damages to PHIBRO.

RULING

The award of moral damages is improper.  To reiterate,

NAPOCOR did not act in bad faith.  Moreover, moral

damages are not, as a general rule, granted to a

corporation.   While it is true that besmirched

reputation is included in moral damages, it cannot

cause mental anguish to a corporation, unlike in the

case of a natural person, for a corporation has no

reputation in the sense that an individual has, and

besides, it is inherently impossible for a corporation to

suffer mental anguish. 

In LBC Express, Inc. v. Court of Appeals, we ruled:

“Moral damages are granted in recompense for

physical suffering, mental anguish, fright, serious

anxiety, besmirched reputation, wounded feelings,

moral shock, social humiliation, and similar injury.

A corporation, being an artificial person and having

existence only in legal contemplation, has no feelings,

no emotions, no senses; therefore, it cannot

experience physical suffering and mental

anguish.  Mental suffering can be experienced only by

one having a nervous system and it flows from real ills,

sorrows, and grief’s of life – all of which cannot be

suffered by respondent bank as an artificial person.”

Jose Parcon at 9:26 PM

Share

No comments:

Post a Comment

‹ Home ›
View web version

About Me

Jose Parcon
Follow 1

Most probably, the people who will stumble into my blogs are my
fellow students in the study of Law. During my freshman year in law
school, I've also stumbled in several law blogs which I find very
helpful during those moments when you're running out of time, specially the case
digests.

Though it's always been a good advice to read the full text, what I did was to read
first the digested form to guide me then the full text.

I will post all the case digests  and other work from time to time, and we'll tweet
my posts via twitter account: @joparcon. Thank you.
View my complete profile

Powered by Blogger.