[No. 32958.

November 8, 1930]
BLOSSOM & COMPANY, INC., plaintiff and appellant, vs. MANILA GAS
CORPORATION, defendant and appellee.

1. 1. WHEN FORMER JUDGMENT is A BAR.In its complaint of March 3, 1927,

plaintiff seeks to recover damages accrued since November 23, 1923, for a wilful breach
of a contract for the sale and delivery of water gas and coal gas tar at stipulated prices,
and for answer defendant alleges that in the former action in the Court of First Instance of
the City of Manila, in which plaintiff here was the plaintiff, and the defendant here was
the defendant, and founded upon the same cause of action alleged in the complaint that
plaintiff recovered judgment against the defendant on the merits, decreeing a breach of
the same contract and awarding damages in favor of the plaintiff in the sum of
P26,119.08 with legal interest from November 23, 1923, which judgment became and is
now final. Held, That the judgment which the plaintiff obtained in the former action
founded upon a breach of the same contract is a bar to this action.

1. 2. ONLY ONE CAUSE OF ACTION WHEN CONTRACT is ENTIRE.As a general

rule, a contract to do several things at several times is divisible, and a judgment for a
single breach of a continuing contract is not a bar to a suit for a subsequent breach. But
where the contract is .entire, and the breach total, there can be only one action in which
plaintiff must recover all damages.

1. 3. WHEN CONTRACT is INDIVISIBLE.When the defendant terminated a continuing

contract by absolute refusal In bad faith to perform, a claim for damages for a breach is
an indivisible demand, and where, as in this case, a former final judgment was rendered,
it is a bar to any damages which plaintiff may thereafter sustain.

1. 4. WHAT PLAINTIFF SHOULD PROVE.In an indivisible contract plaintiff should

prove in the first action not only such. damages as it has then actually sustained, but also
such prospective damages as it may be legally entitled to recover by reason of the breach.

APPEAL from a judgment of the Court of First Instance of Manila. Block, J.

The facts are stated in the opinion of the court.
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Blossom & Co. vs. Manila Gas Corporation
Harvey & O'Brien for appellant.
Ross, Lawrence & Selph and John B. Miller for appellee.

STATEMENT

In its complaint filed March 3, 1927, the plaintiff alleges that on September 10, 1918, it
entered into a contract with the defendant in which the plaintiff promised and undertook to
purchase and receive from the defendant, and the defendant agreed to sell and deliver to
the plaintiff, for a period of four years, three tons of water gas tar per month from
September to January 1, 1919, and twenty tons per month after January 1, 1919, for the
remaining period of the contract; one-half ton of coal gas tar a month from, September to
January 1, 1919, and six tons per month after January 1, 1919, for the remainder of the
contract, delivery to be made at the plant of the defendant in the City of Manila, without
containers, and at the price of P65 per ton for each kind of gas tar, it being agreed that this
price should prevail only so long as the raw materialscoal and crude oilused by the
defendant in the manufacture of gas should cost the defendant the same price as that
prevailing at the time of the contract, and that in the event of an increase or decrease in the
cost of raw materials, there would be a corresponding increase or decrease in the price of
the tar. That on January 31, 1919, this contract was amended so that it should continue to
remain in force for a period of ten years from January 1, 1919, and it was agreed that the
plaintiff should not be obliged to take the quantities of the tars required during the year
1919, but that it might purchase tars in such quantities as it could use to advantage at the
stipulated price. That after the year 1919, the plaintiff would take at least the quantities
specified in the contract of September 10, 1918, to be taken from and after January 1,
1919, and that at its option it would have the right to take any
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Blossom & Co. vs. Manila Gas Corporation

quality of water gas tar in excess of the minimum quatity specified in that contract, and up
to the total amount of output of that tar of defendant's plant, and also to take any quantity
of coal gas tar in excess of the minimum quantity specified in that contract and up to 50
per cent of defendant's entire output of coal gas tar, and that by giving the defendant ninety
days' notice, it would have the right at its option to take the entire output of defendant's
coal gas tar, except such as it might need for its own use in and about its plant. That in
consideration of this modification of the contract of September 10, 1918? plaintiff agreed
to purchase from the defendant a certain piece of land lying adjacent to its plant at the
price of P5 per square meter, the proof of which is evidenced by Exhibit C. That pursuant
to Exhibit C, defendant sold and conveyed the land to the plaintiff which in turn executed
a mortgage thereon to the defendant for P17,140.20, to secure the payment o the balance
of the purchase price.
It is then alleged:
"VIII. That about the last part of July, 1920, the defendant herein, the Manila Gas
Corporation, willfully and deliberately breached its said contract, Exhibit C, with the
plaintiff by ceasing to deliver any coal and water gas tar to it thereunder solely because of
the increased price of its tar products and its desire to secure better prices therefor than
plaintiff was obligated to pay to it, notwithstanding the frequent and urgent demands made
by the plaintiff upon it to comply with its aforesaid contract by continuing to deliver the
coal and water gas tar to the plaintiff thereunder, but the said defendant flatly refused to
make any deliveries under said contract, and finally on November 23, 1923, the plaintiff
was forced to commence action against the defendant herein in the Court of First Instance
of Manila, being case No. 25352, of that court, entitled 'Blossom & Co., plaintiff, vs.
Manila Gas Corporation, defendant to recover the damages which it had up to that time
suffered by reason of such flagrant violation
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Blossom & Co. vs. Manila Gas Corporation

of said contract on the part of the defendant herein, and to obtain the specific performance
of the said contract, and after due trial of that action, judgment was entered therein in favor
of the plaintiff herein and against the said defendant, the Manila Gas Corporation, for the
sum of P26,119.08, as the damages suffered by this plaintiff by the defendant's breach of
said contract from July, 1920, up to and including September, 1923, with legal interest
thereon from November 23, 1923, and for the costs but the court refused to order the said
defendant to resume the delivery of the coal and water gas tar to the plaintiff under said
contract, but left the plaintiff with its remedy for damages against said defendant for the
subsequent breaches of said contract, which said decision, as shown by the copy attached
hereto as Exhibit G, and made a part hereof, was affirmed by our Supreme Court on March
3, 1926;
"IX. That after the defendant had willfully and deliberately violated its said contract, as
herein-before alleged, and the plaintiff had suffered great damage by reason thereof, the
plaintiff claimed the right to off-set its damages against the balance due from it to said
defendant on account of the purchase of said land from the defendant, and immediately
thereupon and notwithstanding said defendant was justly indebted to the plaintiff at that
time, as shown by the judgment of the court, Exhibit G, in more than four times the
amount due to it from the plaintiff, the said defendant caused to be presented against the
plaintiff a foreclosure action, known as the Manila Gas Corporation versus Blossom &
Company, No. 24267, of the Court of First Instance of Manila, and obtained judgment
therein ordering that Blossom & Company pay the last installment and interest due on said
land or else the land and improvements placed thereon by the plaintiff would be sold, as
provided by law in such cases to satisfy the same, and the said defendant proceeded with
the sale of said property under said judgment and did everything in its
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Blossom & Co. vs. Manila, Gas Corporation

power to sell the same for the sole purpose of crushing and destroying the plaintiff's
business and thus rendering it impossible for the plaintiff herein to continue with its said
contract in the event that said defendant might in the future consider it more profitable to
resume performance of the same, but fortunately the plaintiff was able to redeem its
property, as well as to comply with its contract, and continued demanding that the
defendant perf ormed its said contract and deliver to it the coal and water gas tar required
thereby."
That the defendant made no deliveries under its contract, Exhibit C, from July, 1920, to
March 26, 1926, or until after the Supreme Court affirmed the judgment of the lower court
for damages in the sum of P26,119.08. 1

It is then alleged that:

"* * * On March 26, 1926, the said defendant offered to resume delivery to the plaintiff
from that date of the minimum monthly quantities of tars stated in its contract, and the
plaintiff believing that the said defendant was at least going to try to act in good faith in
the further performance of its said contract, commenced to accept deliveries of said tars
from it, and at once ascertained that the said defendant was deliberately charging it prices
much higher than the contract price, and while the plaintiff accepted deliveries of the
minimum quantities of tars stated in said contract up to and including January, 1927,
(although it had demanded deliveries of larger quantities thereunder, as hereinafter
alleged) and paid the increased pHces demanded by the defendant, in the belief that it was
its duty to minimize the damages as much as possible which the defendant would. be
required to pay to it by reason of its violation of said contract, it has in all cases done so
under protest and with the express reservation of the right to demand from the said
defendant an adjusfr-

_____________
1
48 PhiL, 848.

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 Blossom & Co. vs. Manila Gas Corporation

ment of the prices charged in violation of its contract, and the right to the payment of the
losses which it had and would suffer by reason of its refusal to make additional deliveries
under said contract, and it also has continuously demanded that the said defendant furnish
to it statements supported by its invoices, showing the cost prices of its raw materials-
coal and crude oilupon which the contract price of the tars in question is fixed, which is
the only way the plaintiff has to calculate the true price of said tars, but said defendant has
and still refuses to furnish such information, and will continue to refuse to do so, unless
ordered to furnish such information to the plaintiff by the court, and the plaintiff believes
from the information which it now has and so alleges that the said defendant has
overcharged it on the deliveries of said tars mentioned in the sum of at least P10,000, all in
violation of the rights of the plaintiff under its said contract with the defendant."

That on January 31, 1926, and pursuant to Exhibit C, plaintiff notified the defendant in
writing that commencing with the month of August, 1926, it desired to take delivery of 50
per cent of defendant's coal tar production for that month, and that on November 1, 1926,
it desired to take the entire output of defendant's coal gas tar, but that the defendant refused
and still refuses to make such deliveries, unless plaintiff would take all of its water gas tar
production with the desired quantity of coal gas tar, which ref usal was a plain violation of
the contract, That on January 29, 1927, and in accord with Exhibit C, plaintiff notified the
defendant in writing that within ninety days after the initial delivery to it of its total coal
gas tar production, or in February, 1927, it would require 50 per cent of its total water gas
tar production, and that in April, 1927, it would require the total output of the defendant of
both coal and water gas tars, and that it refused to make either of such deliveries.
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Blossom & Co. vs. Manila Gas Corporation

It is then alleged:

"XIV. That as shown by the foregoing allegations of this complaint, it is apparent that
notwithstanding the plaintiff in this case has at all times faithfully performed all the terms
and conditions of said contract, Exhibit C, on its part to be performed, and has at all times
and is now ready, able and willing to accept and pay for the deliveries of said coal and
water gas tars required by said contract and the notices given pursuant thereto, the said
defendant, the Manila Gas Corporation, does not intend to comply with its said contract,
Exhibit C, and deliver to the plaintiff at the times and under the terms and conditions
stated therein the quantities of coal and water gas tars required by said contract, and the
several notices given pursuant thereto, and that it is useless. for the plaintiff to insist
further upon its performance of the said contract, and for that reason the only feasible
course for the plaintiff to pursue is to ask the court for the rescission of said contract and
for the full damages which the plaintiff has suffered from September, 1923, and will suffer
for the remainder of said contract by reason of the defendant's failure and refusal to
perform the same, and the plaintiff has so notified the said defendant."

That since September, 1923, by reason of the bad faith of the defendant, the plaintiff has
been damaged in the sum of P300,000, for which it prays a corresponding judgment, and
that the contract, Exhibit C, be rescinded and declared void and without force and effect.
After the filing and overruling of its demurrer, the defendant filed an answer in the
nature of a general and specific denial, and on April 10, 1928, and upon stipulation of the
parties, the court appointed W. W. Larkin referee, "to take the evidence and, upon
completion of the trial, to report his findings of law and fact to the court."
July 18, 1928, the defendant filed an amended answer in which it alleged as an
affirmative defense, first, that the complaint does not state facts sufficient to constitute a .
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Blossom & Co. vs. Manila Gas Corporation

cause of action for the reason that a prior adjudication has been had of all the issues
involved in this action, and, second, "that on or about the 16th day of- June, 1925, in an
action brought in the Court of First Instance of the City of Manila, Philippine Islands,
before the Honorable Geo. R. Harvey, Judge, by Blossom & Company, plaintiff, vs.
Manila Gas Corporation, defendant, being civil case No. 25352, of said court, f or the
same cause of action as that set forth in the complaint herein, said plaintiff recovered
judgment upon the merits thereof, against said defendant, decreeing a breach of the
contract sued upon herein, and awarding damages therefor in the sum of P26,119.08 with
legal interest from November 23, 1923, and costs of suit, which judgment was upon appeal
affirmed by the Supreme Court of the Philippine Islands, in case G. R. No. 24777 of said
court, on the 3d day of March, 1926, and reported in volume 48 Philippine Reports at page
848," and it prays that plaintiff's complaint be dismissed, with costs.
After the evidence was taken, the referee made an exhaustive report of sixty-six pages
in which he found that the plaintiff was entitled to P56,901.53 damages, with legal interest
from the date (of the filing of the complaint, to which both parties filed numerous
exceptions.
In its decision the court says:

"Incidental references have been made to the referee's report. It was admirably prepared.
Leaving aside the question of damages and the facts upon which the referee assessed them,
the facts are not in disputeat least not in serious dispute. They appear in the
documentary evidence and this decision is based upon documents introduced into evidence
by plaintiff. If I could have agreed with the referee in respect to the question of law, I
should have approved his report in toto. If defendant is liable for the damages accruing
from November 23, 1923, the date the first complaint was filed, to April 1st, 1926, the date
of resumption of relations; and if defendant, after such resumption of relations, again
violated the contract,

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the damages assessed by the referee, are, to my way of thinking, as fair as could be
estimated. He went to tremendous pains in figuring out the details upon which he based his
decision. Unfortunately, I cannot agree with his legal conclusions and the report is set
aside except wherein specifically approved.
"It is unnecessary to resolve specifically the many exceptions made by both parties to
the referee's report. It would take much time to do so. Much time has already been spent in
preparing this decision. Since both parties have informed me that in case of adverse
judgment, an appeal would be taken, I desire to conclude the case so that delay will be
avoided.
"Let judgment be entered awarding damages to plaintiff in the sum of P2,219.60, with
costs."

From which plaintiff only appealed and assigns twentyfour different errors, of which the
following are material to this opinion:

1. "I. The trial court erred in holding that this suit in so far as the damages from
November, 1923, to March 31, 1926, are concerned, is res adjudicata.
2. "II. The trial court erred in holding that the defendant repudiated the contract in
question as a whole, and that the plaintiff when it brought its first suit to collect
damages had already elected and consented to the dissolution of the contract, and
its choice once made, being final, it was estopped to claim that the contract was
alive when that suit was brought.

* * * * * * *

3. "VII. The trial court erred in refusing to sustain plaintiff's third exception to the
legal interpretation placed on the contract in this case by the referee with
reference to quantity of tars and his conclusion with respect to the terms thereof
that:

1. " 1. Plaintiff must take and defendant must deliver either the minimum or
maximum quantity of water gas
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Blossom & Co. vs. Manila Gas Corporation

1. tar and not any quantity from the minimum to the maximum and/or
2. " '2. Plaintiff must take either the minimum and any quantity up to fifty per cent of
entire output of coal gas tar.
3. " '3. With ninety days' notice by plaintiff to defendant the former must take and
the latter must deliver total output of both tars, except such as might be needed by
defendant for use in and about its plant and not any quantity from the minimum up
to total output of both tars.' (See page 47, Referee's report.)

"And in holding that the option contained in said contract, taking into consideration the
purposes of both parties in entering into the contract, was as claimed by defendant: all the
water gas tar and 50 per cent of the coal gas tar upon immediate notice, and all tars upon
ninety days' notice.

1. "VIII. The trial court erred in refusing to sustain plaintiff's fourth exception to the
finding and conclusion of the referee that from the correspondence between the
parties, it was apparent that plaintiff did not make a right use of its option, and
that the letter of June 25, 1926, and the subsequent demands, with exception of
the letter of July 31, 1926, were not made in pursuance to the terms of the
contract, and that defendant had no liability in refusing to comply therewith, and
in allowing plaintiff damages only for the failure of the defendant to deliver
quantities shown in Exhibits Ref. 21 and 22. (See pages 51, 52, Referee's report.)
2. "IX. The trial court erred in finding and holding that the demands of plaintiff for
additional tars under its contract with the defendant were extravagant and not
made in good faith, and that when it wrote to defendant that it desired maximum
quantities of coal gas tars and only minimum of water gas tars, but with the
reservation of going back to minimum quantities of both at any time it

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236 PHILIPPINE REPORTS ANNOTATED

Blossom & Co. vs. Manila Gas Corporation
 1. chose, it announced its intention of breaching the contract, and defendant was
under no obligation to deliver maximum quantities of either tars, and since this
was the efficient cause of the failure of defendant to deliver or plaintiff to accept
tars, the blame is attributable to plaintiff, and it cannot recover for a rescission.

* * * * * * *

1. "XXIII. The trial court erred in refusing to sustain plaintiff's seventeenth

exception to the finding and conclusion of the referee that the plaintiff is entitled
to recover from the defendant only the following sums:

Water gas tar (Exhibit Ref. 21) ............................................................. ... P38,134.60

Coal gas tar (Exhibit Ref. 22) .................................................................... 16,547.33
Overcharges on deliveries (Exhibit Ref. 23) .............................................. 2,219.60
or a total of..................................................... ................................ ... 56,901.53

with interest, and in not awarding to the plaintiff as damages in this case the sum of
P319,253.40, with legal interest thereon from the date of filing the complaint in this case,
in the manner and form computed by it, and in awarding damages to the plaintiff for the
sum of only P2,219.60, with costs."
* * * * * * *

JOHNS, J.:

In this action plaintiff seeks to recover damages from the defendant which it claims to
have sustained after September, 1923, arising from, and growing out of, its original
contract of September 10, 1918, as modified on January 1, 1919, to continue for a period
of ten years from that date. In paragraph VIII of its complaint, plaintiff alleges that about
the last part of July, 1920, the defendant "willfully and deliberately breached its said
contract," and that it "flatly refused to make any deliveries under said contract, and finally
on November 23, 1923," it was forced to commence action in the Court of First Instance
against the
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Blossom & Co. vs. Manila Gas Corporation

defendant, known as case No. 25352, to recover the damages which it had then sustained
by reason of such flagrant violation of said contract on the part of the defendant, in which
judgment was rendered in favor of the plaintiff and against the defendant for P26,119.08,
as damages "suffered by this plaintiff by the defendant's breach of said contract from July,
1920, up to and including September, 1923, with legal interest thereon from November 23,
1923, and for the costs," in which the court refused to order the defendant to resume the
delivery of the coal and water gas tar to the plaintiff, in accord with said contract, but left it
with its remedy for damages against the defendant for any subsequent breaches of the
contract. A copy of that judgment, which was later affirmed by this court, is attached to,
marked Exhibit G, and made a part of, the complaint in this action.
In their respective briefs, opposing counsel have much to say about the purpose and
intent of that judgment, and it is vigorously asserted that it was never intended that it
should be or become a bar to another action by the plaintiff to recover any damages it may
have sustained after September, 1923, during the remainder of the ten-year period of that
contract. Be that as it may, it must be conceded that the question as to what would be the
legal force and effect of that judgment in that case was never presented to, or decided by,
the lower court or this court. In the very nature of things, neither court in that case would
have the power to pass upon or decide the legal force and effect of its own judgment, for
the simple reason that it would be premature and outside of the issues of any pleading, and
could not be raised or presented until after the judgment became final, and then only by an
appropriate plea, as in this case.
Plaintiff specifically alleges that the defendant willfully and deliberately breached the
contract, and "flatly refused to make any deliveries under said contract," by reason of
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Blossom & Co. vs. Manila, Gas Corporation

which it was forced to and commenced its former action in which it was awarded
P26,119.08 damages against the defendant by reason of its breach of the contract from
July, 1920, to September, 1923.
In the final analysis, plaintiff in this action seeks to recover damages growing out of,
and arising from, other and different breaches of that same contract after November, 1923,
for the remainder of the ten-year period, and the question is thus squarely presented as to
whether the rendition of the former judgment is a bar to the right of the plaintiff to recover
damages from and after September, 1923, arising from, and growing out of, breaches of
the original contract of September 10, 1918, as modified on January 1, 1919. That is to
say, whether the plaintiff, in a former action, having recovered judgment for the damages
which it sustained by reason of a breach of its contract by the defendant up to September,
1923, can now in this action recover damages it may have sustained after September,
1923, arising from, and growing out of, a breach of the same contract, upon and for which
it recovered its judgment in the former action.
In the former action in which the judgment was rendered, it is alleged in the complaint:
" '7. That about the last part of July or the first part of August, 1920, the Manila Gas
Corporation, the defendant herein, without any cause ceased delivering coal and water gas
tar to the plaintiff herein; and that from that time up to the present date, the plaintiff
corporation, Blossom & Company, has frequently and urgently demanded of the
defendant, the Manila Gas Corporation, that it comply with its aforesaid contract Exhibit A
by continuing to deliver coal and water gas tar to this plaintiffbut that the said defendant
has refused, and still refuses, to deliver to the plaintiff any coal and water gas tar
whatsoever under the said contract Exhibit A, since the said month of July, 1920.
* * * * * * *

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Blossom & Co. vs. Manila Gas Corporation

"'9. That owing to the bad faith of the said Manila Gas Corporation, defendant herein, in
not living up to its said contract Exhibit A, made with this plaintiff, and ref using now to
carry out the terms of the same, by delivering to this plaintiff the coal and water gas tar
mentioned in the said Exhibit A, has caused to this plaintiff great and irreparable damages
amounting to the sum total of one hundred twenty-four thousand eight hundred fortyeight
pesos and seventy centavos (P124,848.70); and that the said defendant corporation has
refused, and still refuses, to pay to this plaintiff the whole or any part of the aforesaid sum.
" '10. That the said contract Exhibit A, was to be in force until January 1, 1929, that is
to say, for ten (10) years counted from January 1, 1919; and that, unless the defendant
again commence to furnish and supply this plaintiff with coal and water gas tar, as
provided for in the said contract Exhibit A, the damages already suffered by this plaintiff
will continually increase and become larger and larger in the course of years preceding the
termination of the said contract on January 1, 1929.'"

In that action plaintiff prays for judgment against the def endant:

1. " ' (a) That upon trial of this cause judgment be rendered in favor of the plaintiff
and against the defendant for the sum of P124,848.70, with legal interests thereon
from November 23, 1923;
2. "'(b) That the court specifically order the defendant to resume the delivery of the
coal and water gas tar to the plaintiff under the terms of the said contract Exhibit
A of this complaint.' "
In the final analysis, plaintiff must stand or fall on its own pleadings, and tested by that
rule, it must be admitted that the plaintiff's original cause of action, in which it recovered
judgment for damages, was founded on the tenyear contract, and that the damages which it
then recovered were recovered for a breach of that contract.
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Blossom & Co. vs. Manila Gas Corporation

Both actions are founded on one and the same contract. By the terms of the original
contract of September 10, 1918, the defendant was to sell and the plaintiff' was to purchase
three tons of water gas tar per month from September to January 1, 1919, and twenty tons
of water gas tar per month after January 1, 1919, one-half ton of coal gas tar per month
from September to January 1, 1919, and six tons of coal gas tar per month after January 1,
1919. That from and after January 1, 1919, plaintiff would take at least the quantities
specified in the contract of September 10, 1918, and that at its option, it would have the
right to take the total output of water gas tar of defendant's plant and 50 per cent of the
gross output of its coal gas tar, and upon giving ninety days' notice, it would have the right
to the entire output of coal gas tar, except such as the defendant might need for its own
use. That is to say, the contract provided for the delivery to the plaintiff from month to
month of the specified amounts of the different tars as ordered and requested by the
plaintiff. In other words, under plaintiff's own theory, the defendant was to make deliveries
from month to month of the tars during the period of ten years, and it is alleged in both
complaints that the defendant broke its contract, and in bad faith refused to make any more
deliveries.
In 34 Corpus Juris, p. 839, it is said:

"As a general rule a contract to do several things at several times is divisible in its nature,
so as to authorize successive actions; and a judgment recovered for a single breach of a
continuing contract or covenant is no bar to a suit for a subsequent breach thereof. But
where the covenant or contract is entire, and the breach total, there can be only one action,
and plaintiff must therein recover all his damages."

In the case of Roehm vs. Horst, 178 U. S., 1; 44 Law. ed., 953, that court said:

"An unqualified and positive refusal to perform a contract, though the performance thereof
is not yet due, may,

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Blossom & Co. vs. Manila Gas Corporation

if the renunciation goes to the whole contract, be treated as a complete breach which will
entitle the injured party to bring his action at once."

15 Ruling Case Law, 966, 967, sec. 441, says:

"Similarly if there is a breach by the vendor of a contract for the sale of goods to be
delivered and paid for in installments, and the vendee maintains an action therefor and
recovers damages, he cannot maintain a subsequent action to recover for the failure to
deliver later installments."

In Pakas vs. Hollingshead, 184 N. Y., 211; 77 N. E., 40; 3 L. R. A. (N. S.), 1042, the
syllabus says:

"Upon refusal, by the seller, after partial performance, longer to comply with his contract
to sell and deliver a quantity of articles in installments, the buyer cannot keep the contract
in force and maintain actions for breaches as they occur, but must recover all his damages
in one suit."

And on page 1044 of its opinion, the court says:

"The learned counsel for the plaintiff contends that the former judgment did not constitute
a bar to the present action, but that the plaintiff had the right to elect to waive or disregard
the breach, keep the contract in force, and maintain successive actions for damages from
time to time as the installments of goods were to be delivered, however numerous these
actions might be. It is said that this contention is supported in reason and justice, and has
the sanction of authority at least in other jurisdictions. We do not think that the contention
can be maintained. There is not, as it seems to us, any judicial authority in this state that
gives it any substantial support. On the contrary, we think that the cases, so far as we have
been able to examine them, are all the other way, and are to the effect that, inasmuch as
there was a total breach of the contract by the defendants' refusal to deliver, the plaintiff
cannot split up his demand and maintain successive actions, but must either recover all his
damages in the first suit

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Blossom & Co. vs. Manila Gas Corporation
or wait until the contract matured or the time for the delivery of all the goods had arrived.
In other words, there can be but one action for damages for a total breach of an entire
contract to deliver goods, and the fact that they were to be delivered in installment from
time to time does not change the general rule."

The case of L. Bucki & Son Lumber Co. vs. Atlantic Lumber Co. (109 Federal, 411), of
the United States Circuit Court of Appeals for the Fifth Circuit, is very similar.
The syllabus says:
"1. CONTRACTSCONSTRUCTIONENTIRE CONTRACT.A contract was
made for the sale of a large quantity of logs to be delivered in monthly installments during
a period of eight years, payments to be made also in installments at times having relation
to the deliveries. It contained stipulations as to such payments, and guaranties as to the
average size of the logs to be delivered in each installment. Held, that it was an entire
contract, and not a number of separate and independent agreements for the sale of the
quantity to be delivered and paid for each month, although there might be breaches of the
minor stipulations and warranties with reference thereto which would warrant suits
without a termination of the contract.
"2. JUDGMENTSMATTERS CONCLUDEDACTION ?OR BREACH OF
INDIVISIBLE CONTRACT.The seller declared the contract terminated for alleged
breaches by the purchaser, and brought suit for general and special damages, the latter
covering payments due for installments of logs delivered. By way of set-off and
recoupment against this demand, the purchaser pleaded breaches of the warranty as to the
size of the logs delivered during the months for which payment had not been made. Held,
that the judgment in such action was conclusive as to all claims or demands of either party
against the other growing out of the entire contract, and was a bar to a subsequent suit
brought by the purchaser to recover for other breaches of the same warranty in relation to
deliveries made in previous months."
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Blossom & Co. vs. .Manila, Gas Corporation

On page 415 of the opinion, the court says:

"When the contract was ended, the claims of each party for alleged breaches and damages
therefor constituted an indivisible demand; and when the same, or any part of the same,
was pleaded, litigation had, and final judgment rendered, such suit and judgment constitute
a bar to subsequent demands which were or might have been litigated. (Baird vs.-U. S., 96
U. S., 430; 24 L. ed., 703.)"
In Watts vs. Weston (238 Federal, 149), Circuit Court of Appeals, Second Circuit, the
syllabus says:

"1. JUDGMENT593JUDGMENT AS BARMATTERS CONCLUDED.Where a

continuing contract was terminated by the absolute refusal of the party whose action was
necessary to further perform, a claim for damages on account of the breach constituted an
indivisible demand, and when the same or any part of the same was pleaded, litigated, and
final judgment rendered, such suit and judgment constitute a bar to subsequent demands
which were or might have been litigated therein."

And on page 150 of the opinion, the court says:

"It is enough to show the lack of merit in the present contention to point out as an
inexorable rule of law that, when Knevals' contract was discharged by his total repudiation
thereof, Watts' claims for breaches and damages therefor 'constituted an indivisible
demand, and when the same, or any part of the same, was pleaded, litigation had and final
judgment rendered, such suit and judgment constitute a bar to subsequent demands which
were or might have been litigated.' (Bucki, etc., Co. vs. Atlantic, etc., Co., 109 Fed. at page
415; 48 C. C. A., 459; Cf. Landon vs. Bulkley, 95 Fed., 344; 37 C. C. A., 96.)
"The rule is usually applied in cases of alleged or supposed successive breaches, and
consequently severable demands for damages; but if the contract has been discharged by
breach, if suit for damages is all that is left, the rule is applicable, and every demand
arising from that contract and possessed by any given plaintiff must be presented

244

244 PHILIPPINE REPORTS ANNOTATED

Blossom & Co. vs. Manila, Gas Corporation

(at least as against any given defendant) in one action; what the plaintiff does not advance
he foregoes by conclusive presumption."

In Abbott vs. 76 Land and Water Co. (118 Pac., 425; 161 Cal., 42), at page 428, the court
said:

"In Fish vs. Folley, 6 Hill (N. Y.), 54, it was held, in accord with the rule we have
discussed, that, where the defendant had covenanted that plaintiff should have a continual
supply of water for his mill from a dam, and subsequently totally failed to perform for nine
years, and plaintiff brought an action for the breach and recovered damages sustained by
him to that time, the judgment was a bar to a second action arising from subsequent failure
to perform, on the theory that, although the covenant was a continuing one in one sense, it
was an entire contract, and a total breach put an end to it, and gave plaintiff the right to sue
for an equivalent in damages.
"In such a case it is no warrant for a second action that the party may not be able to
actually prove in the first action all the items of the demand, or that all the damage may
not then have been actually suffered. He is bound to prove in the first action not only such
damage as has been actually suffered, but also such prospective damage by reason of the
breach as he may be legally entitled to, for the judgment he recovers in such action will be
a conclusive adjudication as to the total damage on account of the breach."

It will thus be seen that, where there is a complete and total breach of a continuous
contract for a term of years, the recovery of a judgment for damages by reason of the
breach is a bar to another action on the same contract for and on account of the continuous
breach.
In the final analysis, there is no real dispute about any material fact, and the important
and decisive question is the legal construction of the pleadings in the former case and in
this case, and of the contract between the plaintiff and the defendant of January 1, 1920.
245

VOL. 55, NOVEMBER 8, 1930 245

Blossom & Co. vs. Manila Gas Corporation

The complaint in the former case specifically alleges that the defendant "has refused, and
still refuses, to deliver to the plaintiff any coal and water gas tar whatsoever under the said
contract Exhibit A, since the said month of July, 1920." "That owing to the bad faith of the
said Manila, Gas Corporation, defendant herein, in not living up to its said contract Exhibit
A, made with this plaintiff, and refusing now to carry out the terms of the same." That is a
specific allegation not only of a breach of the contract since the month of July, 1920, but
of the bad faith of the defendant in its continuous refusal to make deliveries of any coal
and water gas tar. That amended complaint was filed on July 11, 1924, or four years after
the alleged bad faith in breaking the contract.
Having recovered damages against it, covering a period of four years, upon the theory
that the defendant broke the contract, and in bad faith refused to make deliveries of either
of the tars, hoW can the plaintiff now claim and assert that the contract is still in force and
effect? In the instant case the plaintiff alleges and relies upon the tenyear contract of
January 1, 1920, which in bad faith was broken by the defendant. If .the contract was then
broken, how can it be enforced in this action?
It is admitted that the defendant never made any deliveries of any tar from July, 1920,
to April, 1926. Also that it made nine deliveries to plaintiff of the minimum quantities of
coal and water gas tar from April 7, 1926, to January 5, 1927.
 Plaintiff contends that such deliveries were made under and in continuation of the old
contract.
March 26, 1926, after the decision of this court affirming the judgment in the original
action, plaintiff wrote the defendant:

"* * * It is our desire to take deliveries of at least the minimum quantities set forth therein
and shall appreciate to have you advise us how soon you will be in a position to make
deliveries; * * *

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246 PHILIPPINE REPORTS ANNOTATED

Blossom & Co. vs. Manila Gas Corporation

"*** In view of the fact that you have only effected settlement up to November 23, 1923,
please inform us what adjustment you are willing to make for the period of time that has
since elapsed without your complying with the contract."

In response to which on March 31, 1926, the defendant wrote this letter to the plaintiff:

"In reply to your letter of March 26th, 1926, in regard to tar, we beg to advise you that we
are prepared to furnish the minimum quantities of coal and water gas tars as per your
letter, viz: twenty tons of water gas tar and six tons of coal gas tar. The price figured on
present costs of raw materials is P39.01 (Thirty-nine and 01/100 Pesos) per ton of water
gas and P33.59 (Thirty-three and 59/100 Pesos) per ton of coal tar.
"We shall expect you to take delivery and pay for the above amount of tars at our
factory on or bef ore April 7th prox.
"Thereafter we shall be ready to furnish equal amounts on the first of each month.
Kindly make your arrangements accordingly."

On January 29, 1927, the plaintiff wrote the defendant that:

"On July 31st last, we made demand upon you, under the terms of our tar contract, for 50
per cent of your total coal tar production for that month and also served notice on you that
beginning 90 days from August 1st we would require your total output of coal tar monthly;
this in addition to the 20 tons of water gas tar provided for in the contract to be taken
monthly.
* * * * * * *
"We are here again calling on you for your total output of coal tar immediately and the
regular minimum monthly quantity of water gas tar. In this connection we desire to advise
you that within 90 days of your initial delivery to us of your total coal tar output we will
require 50 per

247

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Blossom & Co. vs. Manila, Gas Corporation

cent of your total water gas tar output, and, further, that two months thereafter we will
require your total output of both tars."

February 2, 1927, the defendant wrote the plaintiff:

"Replying to your letter of Jan. 29, we would say that we have already returned to you the
check enclosed therewith. As we have repeatedly informed you we disagree with you as to
the construction of your contract and insist that you take the whole output of both tars if
you wi&h to secure the whole of the coal tar.
"With regard to your threat .of further suits we presume that you will act as advised. If
you make it necessary we shall do the same."
From an analysis of these letters it clearly appears that the plaintiff then sought to rely
upon and enforce the contract of January 1, 1920, and that defendant denied plaintiff's
construction of the contract, and insisted "that you take the whole output of both tars if you
wish to secure the whole of the coal tar."

February 28, 1927, the plaintiff wrote the defendant:

"In view of your numerous violations of and repeated refusal and failure to comply
with the terms and provisions of our contract dated January 30-31, 1919, for the delivery
to us of water and coal gas tars, etc., we will commence action," which it did.
The record tends to show that the tars which the defendant delivered after April 7,
1926, were not delivered under the old contract of January 1, 1920, and that at all times
since July, 1920, the defendant has consistently refused to make any deliveries of any tars
under that contract.
The referee found as a fact that plaintiff was entitled to f=2,219.60 for and on account
of overcharges which the defendant made for the deliveries of fifty-four tons of coal gas
tar, and one hundred eighty tons of water gas tar after April, 1926, and upon that point the
lower court says:
248

248 PHILIPPINE REPORTS ANNOTATED

Lim Cuan Sy vs. Northern Assurance Co.
"The fourth charge that plaintiff makes is meritorious. The price was to be fixed on the
basis of raw materials. The charge for deliveries during 1926 were too high. In this I agree
with entirely with the referee and adopt his findings of fact and calculations. (See Referee's
report, p. 83.) The referee awarded for overcharge during the period aforesaid, the sum of
P2,219.60. The defendant was trying to discourage plaintiff from buying tars and made the
price of raw material appear as high as possible."

That finding is sustained upon the theory that the defendant broke its contract which it
made with the plaintiff for the sale and delivery of the tars on and after April, 1926.
After careful study of the many important questions presented on this appeal in the
exhaustive brief of the appellant, we are clearly of the opinion that, as found by the lower
court, the plea of res judicata must be sustained.
The judgment of the lower court is affirmed.
It is so ordered, with costs against the appellant.

Johnson, Street, Malcolm, Villamor, Ostrand, Romualdez, and Villa-Real, JJ., concur.

Judgment affirmed.

___________

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