REMEDIAL LAW | DANFOSS Inc. v. Continental Cement Corp. G.R. No. 143788, September 9 2005

DANFOSS Inc. v. Continental Cement Corp. 


G.R. No. 143788, September 9 2005 


FACTS Continental Cement Corporation (CCC) purchased two frequency converters from Mechatronics Instruments and Controls, Inc. (MINCI), who relayed the order to Danfoss, Inc. The delivery was scheduled within 8 to 10 weeks from the opening of a letter of credit on September 9, 1997. Before the delivery period expired, CCC cancelled the order on November 13, 1997, citing anticipated delays. CCC then filed a complaint for damages, alleging that the delay caused losses. Danfoss filed a motion to dismiss for failure to state a cause of action, arguing that no breach had occurred since CCC cancelled the order before the delivery deadline. Whether the complaint for damages should be dismissed for failing to state a cause of action and for being premature.


RULING Yes. the complaint was dismissed for failure to state a cause of action and for being premature. The Supreme Court ruled that a cause of action arises only when a party violates another’s right. In this case, Danfoss had not yet breached its obligation to deliver the converters since the cancellation occurred before the delivery deadline. CCC merely speculated that Danfoss would fail to deliver on time, and such speculation is insufficient to constitute a cause of action. The Court emphasized that Danfoss’s obligation was not due and demandable at the time CCC filed the complaint.


The Court reiterated that to dismiss a complaint based on failure to state a cause of action, the deficiency must be apparent from the face of the complaint. Here, the facts showed that Danfoss had not violated any rights, as the delivery deadline had not passed when CCC cancelled the order. Hence, the complaint was prematurely filed, and judicial intervention was unwarranted. The Court granted the petition and dismissed the case.








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