Adr Shipping Services v. Marcelino Gallardo

Summary

This case involves a charter agreement dispute where Marcelino Gallardo paid P242,000 advance fee to ADR Shipping Services for vessel MV Pacific Breeze to transport logs to Taiwan. When the vessel failed to arrive by the agreed February 5, 1988 date, Gallardo cancelled the contract and demanded refund. ADR refused, claiming Stywood Philippines had taken over the charter agreement. However, all three court levels found no credible evidence of any take-over agreement, noting the document was not notarized, undated, and bore a suspicious signature. The Supreme Court applied Civil Code Article 1191 on rescission of reciprocal obligations, ruling that ADR's breach entitled Gallardo to cancel and recover damages. The Court emphasized that contract ambiguities must be construed against the drafter and that express contract terms control when clear. ADR was ordered to refund P242,000 with 6% annual interest plus P20,000 attorney's fees.