Integrated Packaging Corp.

vs CA and Fil-Anchor Paper Fil-Anchor cannot be held liable under the contracts entered
G.R. No. 115117, June 8, 2000 into by Integrated with Philacor.
Facts:
Fil-Anchor is not a party to said agreements. The contract
Integrated Packaging and Fil-Anchor Paper executed entered into was also not a contract pour autrui. The
on May 5, 1978 an order agreement whereby Fil- aforesaid contracts could not affect third persons like Fil-
Anchor bound itself to deliver to petitioner 3450 Anchor because of the basic civil law principle of relativity of
reams of printing paper, worth P1,040,060 on contracts which provides that contracts can only bind the
different schedules. parties who entered into it, and it cannot favor or prejudice a
Later, Integrated Packaging entered into a contract third person, even if he is aware of such contract and has
with Philippine Appliance Corp. (Philacor) to print acted with knowledge thereof.
three volumes of Philacor Cultural Cooks for
delivery on different dates for a total cost of P3M. Indeed, the order agreement entered into by Intergated and
Fil-Anchor was able to deliver 1097 reams of printing Fil-Anchor has not been shown as having a direct bearing on
paper out of the total 3450 reams stated in the the contracts of Integrated with Philacor. As pointed out by
agreement. Integrated alleged that it wrote Fil- Fil-Anchor and not refuted by Integrated, the paper specified
Anchor to deliver the balance since further delay in the order agreement between Integrated and Fil-Anchor
would greatly prejudice Integrated. are markedly different from the paper involved in the
Fil-Anchor was able to make a delivery of the contracts of Integrated with Philacor. Furthermore, the
balance amounting to P766K. However, Integrated demand made by Philacor upon Integrated for the latter to
encountered difficulties in paying Fil-Anchor. Fil- comply with its printing contract was clearly made long after
Anchor then made a formal demand to Integrated to Fil-Anchor filed its complaint against Integrated.
settle their outstanding account. Integrated
thereafter was able to make partial payments.
Meanwhile, petitioner entered into an additional
printing contract with Philacor. Unfortunately,
petitioner failed to fully comply with its contract
with Philacor for the printing of books VIII, IX, X and
XI. Thus, Philacor demanded compensation from
petitioner for the delay and damage it suffered on
account of petitioner's failure.
Fil-Anchor later filed with the RTC a collection suit
against Integrated for the unpaid purchase price of
printing paper bought by Integrated on credit.
Integrated countered among others that Fil-Anchor
failed to deliver the remaining reams after due
demand which Integrated suffered business losses
because of such.
It was ruled in the TC that Integrated should pay Fil-
Anchor for the amount of the reams which it earlier
delivered. It was also ruled that were it not for the
failure of Fil-Anchor to deliver the remaining reams,
Integrated could have sold books to Philacor.

Issue: W/N Fil-Anchor is liable for Integrateds breach of

contract with Philacor