Vivencio Cerrano v. Tan Chuco

Summary

This case involved a breach of contract for hiring a casco (boat). Defendant Tan Chuco initially rented the casco to plaintiff Vivencio Cerrano for P70/month, then agreed to rent it again at P80/month after repairs. However, defendant sold the casco to another company while repairs were ongoing. The trial court awarded substantial damages based on an alleged ten-month custom in Manila port. The Supreme Court reversed, rejecting the alleged custom as unproven and unreasonable. Applying Civil Code provisions by analogy, the Court held that monthly rental creates a month-to-month tenancy. The Court awarded plaintiff P50 for one month's lost profits but denied recovery for expenses incurred in defending unlawful retention of the casco, as these resulted from plaintiff's voluntary actions rather than defendant's breach.