SIY V.

CA Under Article 1191 of the Civil Code, "the injured party may choose between the fulfillment and rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible . . .." The law, however, does not authorize the injured party to rescind the obligation and at the same time seek its partial fulfillment under the guise of recovering damages. MOLINA V. CA Assuming that to be so albeit, by the Deed in question petitioner acknowledged receipt of the P8,000.00 purchase price, it does not by itself bar the transfer of the ownership or possession of the property, much less dissolve the contract of sale. The contract remains but the payment of the price is a resolutory condition, and the remedy of the seller is to exact fulfillment or, in case of a substantial breach, to rescind the contract under Article 1191 of the Civil Code DEIPARINE, JR. V. CA Article 1191, unlike Article 1385, is not predicated on economic prejudice to one of the, parties but on breach of faith by one of them that violates the reciprocity between them. The violation of reciprocity between Deiparine and the Carungay spouses, to wit, the breach caused by Deiparine's failure to follow the stipulated plans and specifications, has given the Carungay spouses the right to rescind or cancel the contract. VELARDE V. CA The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith by the other party who violates the reciprocity between them. The breach contemplated in the said provision is the obligor's failure to comply with an existing obligation. When the obligor cannot comply with what is incumbent upon it, the obligee may seek rescission and, in the absence of any just cause for the court to determine the period of compliance, the court shall decree the rescission. CAMPOS ASSETS CORP. V. CLUB X.O. COMPANY Jurisprudence supports the view that when parties to a contract expressly reserve an option to terminate or rescind a contract upon the violation of a resolutory condition, notice of resolution must be given to the other party when such right is exercised. PHILIPPINE NATIONAL CONSTRUCTION CORP. V. MARS CONSTRUCTION ENTERPRISE INC. The act of treating a contract as cancelled or rescinded on account of infractions by the other contracting party is always provisional; that is, contestable and subject to judicial determination. Judicial action is necessary for its rescission in order to afford the other party an opportunity to be heard and to determine if the rescission was proper. When the herein petitioner resolved or rescinded the Agreement without previous court action, it proceeded at its own risk. DBP V.CA Rescission of a contract will not be permitted for a slight or casual breach, but only such substantial and fundamental breach as would defeat the very object of the parties in making the agreement.

CENTRAL BANK OF THE PHIL.V. BICHARA Respondents should not be allowed to rescind the contract where they themselves did not perform their essential obligation thereunder. It should be emphasized that a contract of sale involves reciprocity between the parties. Since respondents were in bad faith, they may not seek the rescission of the agreement they themselves breached. HEIRS OF THE LATE JUSTICE JBL REYES V. CA The law on obligations and contracts does not prohibit parties from entering into agreement providing that a violation of the terms of the contract would cause its cancellation even without judicial intervention. PANGILINAN V. CA The rationale for the foregoing is that in contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper. Moreover, the vendor's right in contracts to sell with reserved title to extrajudicially cancel the sale upon failure of the vendee to pay the stipulated installments and retain the sums and installments already received has long been recognized by the well-established doctrine of 39 years standing. LIM V. CA Judicial rescission is required under Article 1191 of the Civil Code. However, this rule is not absolute. We have held that in proper cases, a party may take it upon itself to consider the contract rescinded and act accordingly albeit subject to judicial confirmation, which may or may not be given. It is true that the rescinding party takes a risk that its action may not be approved by the court. GOLDENROD, INC. V. CA Article 1385 of the Civil Code provides that rescission creates the obligation to return the things which were the object of the contract together with their fruits and interest. The vendor is therefore obliged to return the purchase price paid to him by the buyer if the latter rescinds the sale, or when the transaction was called off and the subject property had already been sold to a third person, as what obtained in this case. PAY V. VDA.DE PALANCA The obligation being due and demandable, it would appear that the filing of the suit after fifteen years was much too late. For again, according to the Civil Code, which is based on Section 43 of Act No. 190, the prescriptive period for a written contract is that of ten years. LUZON BROKERAGE CO. INC.V, MARITIME BLDG. CO.INC. ". . . the failure to pay any installment or interest when due shall ipso facto cause the whole unpaid balance of the principal and interest to be and become immediately due and payable." He thus articulated the inescapable conclusion that the express contractual stipulations "make it crystal clear that the full payment of the price (through the punctual performance of the monthly payments) was a condition precedent to the execution of the final sale and to the transfer of the

property from Myers to Maritime; so that there was to be no actual sale until and unless full payment was made. There can be no rescission of an obligation that is still non-existent, the suspensive condition not having happened. CORONEL V. CA It is essential to distinguish between a contract to sell and a conditional contract of sale specially in cases where the subject property is sold by the owner not to the party the seller contracted with, but to a third person, as in the case at bench. In a contract to sell, there being no previous sale of the property, a third person buying such property despite the fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is no double sale in such case. Title to the property will transfer to the buyer after registration because there is no defect in the owner-seller's title per se, but the latter, of course, may be sued for damages by the intending buyer. In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the sale becomes absolute and this will definitely affect the seller's title thereto. In fact, if there had been previous delivery of the subject property, the seller's ownership or title to the property is automatically transferred to the buyer such that, the seller will no longer have any title to transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer of the property who may have had actual or constructive knowledge of such defect in the seller's title, or at least was charged with the obligation to discover such defect, cannot be a registrant in good faith. Such second buyer cannot defeat the first buyer's title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property subject of the sale. RILLO V. CA In a contract to sell real property on installments, the full payment of the purchase price is a positive suspensive condition, the failure of which is not considered a breach, casual or serious, but simply an event which prevented the obligation of the vendor to convey title from acquiring any obligatory force. DAVIES INC. V. CA We distinguished between a condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. While failure to comply with the first condition results in the failure of a contract, failure to comply with the second merely gives the other party options and/or remedies to protect his interests. RUSTAN PULP & PAPER MILLS INC. V. IAC A purely potestative imposition of this character must be obliterated from the face of the contract without affecting the rest of the stipulations considering that the condition relates to the fulfillment of an already existing obligation and not to its inception. It is, of course, a truism in legal jurisprudence that a condition which is both potestative (or facultative) and resolutory may be valid, even though the saving clause is left to the will of the obligor

BALURAN V. NAVARRO A resolutory condition is one which extinguishes rights and obligations already existing. Thus, the mutual agreement each party enjoying "material possession" of the other's property was subject to a resolutory condition the happening of which would terminate the right of possession and use. SMITH, BELL & CO. V. SOTELO And as the export of the machinery in question was, as stated in the contract, contingent upon the sellers obtaining certificate of priority and permission of the United States Government, subject to the rules and regulations, as well as to railroad embargoes, then the delivery was subject to a condition the fulfillment of which depended not only upon the effort of the herein plaintiff, but upon the will of third persons who could in no way be compelled to fulfill the condition. In cases like this, which are not expressly provided for, but impliedly covered, by the Civil Code, the obligor will be deemed to have sufficiently performed his part of the obligation, if he has done all that was in his power, even if the condition has not been fulfilled in reality. HERMOSA V. LONGARA The obligation is clearly governed by the second sentence of article 1115 of the old Civil Code (8 Manresa, 126). The condition is, besides, a suspensive condition, upon the happening of which the obligation to pay is made dependent. And upon the happening of the condition, the debt became immediately due and demandable. As the obligation retroacts to the date when the contract was entered into, all amounts advanced from the time of the agreement became due, upon the happening of the suspensive condition. As the obligation to pay became due and demandable only when the house was sold and the proceeds received in the islands, the action to recover the same only accrued, within the meaning of the statute of limitations, on date the money became available here hence the action to recover the advances has not yet prescribed. TRILLANA V. QUEZON COLLEGE Indeed, the need for express acceptance on the part of the Quezon College, Inc. becomes the more imperative, in view of the proposal of Damasa Crisostomo to pay the value of the subscription after she has harvested fish, a condition obviously dependent upon her sole will and, therefore, facultative in nature, rendering the obligation void, under article 1115 of the old Civil Code which provides as follows: "If the fulfillment of the condition should depend upon the exclusive will of the debtor, the conditional obligation shall be void. If it should depend upon chance, or upon the will of a third person, the obligation shall produce all its effects in accordance with the provisions of this code." It cannot be argued that the condition solely is void, because it would have served to create the obligation to pay, unlike a case, exemplified by Osmea vs. Rama (14 Phil., 99), wherein only the potestative condition was held void because it referred merely to the fulfillment of an already existing indebtedness. PLDT V. JETURIAN Petitioner adopted a Plan for Employees Pensions in 1923. In 1945, the Board of Directors of the petitioner discontinue the pension plan and all payments thereunder which will take effect retroactively. Hence, respondents filed an action for monetary benefits due to them pursuant to the said pension plan. The court ruled that the prewar employees be compensated according to the

service and age limit provided by the pension plan. Petitioner, on the other hand, argues that they can not be held liable to the employees except upon fulfillment of the conditions stated in the pension plan (age 50 and 20 years service) The pension plan was not a mere offer of gratuity by the company, inspired by no other purpose than to benefit the employees. The plan sought to induce the employees to continue indefinitely in the service, and to spur them to greater efforts in its service and increased zeal in its behalf. The plan ripened into a binding contract upon its implied acceptance of the employees. Not being a donation, there is no statutory requirement that acceptance of the plan should be express. The assent and acceptance of the employees is inferable from their entering the employ of the company, or their stay therein after the plan was made known. The company violated the contract with its employees, by discontinuing the plan without their consent, is not in a position now to insist upon the terms of the very contract it has breached. In justice to the company, however, those prewar employees who died or voluntarily left the service before the outbreak of the war should be excluded from the distribution of pension benefits. DE LA RAMA STEAMSHIP CO. V.TAN SANCHO V. LIZARRAGA it is a well known principle that special provisions prevail over general provisions. TAYAG V. CA

NAGA TELEPHONE COMP. V. CA

Based on this definition, respondent court's finding that the provision in the contract, to wit: "(a)That the term or period of this contract shall be as long as the party of the first part (petitioner) has need for the electric light posts of the party of the second part (private respondent) . . ." is a potestative condition, is correct. However, it must have overlooked the other conditions in the same provision, to wit: ". . . it being understood that this contract shall terminate when for any reason whatsoever, the party of the second part (private respondent) is forced to stop, abandoned (sic) its operation as a public service and it becomes necessary to remove the electric light post (sic);" which are casual conditions since they depend on chance, hazard, or the will of a third person. 20 In sum, the contract is subject to mixed conditions, that is, they depend partly on the will of the debtor and partly on chance, hazard or the will of a third person, which do not invalidate the aforementioned provision

UNIVERSAL FOOD CORP. V. CA However, in this case the dismissal of the respondent patentee Magdalo V. Francisco, Sr. as the permanent chief chemist of the corporation is a fundamental and substantial breach of the Bill of Assignment. He was dismissed without any fault or negligence on his part. Thus, apart from the legal principle that the option to demand performance or ask for rescission of a contract belongs to the injured party, the fact remains that the respondents-appellees had no alternative but to file the present action for rescission and damages. CENTRAL PHILIPPINE UNIVERSITY V. CA SANTOS V. CA CASINO JR. V. CA F.F.CRUZ &CO. INC. V. HR CONSTRUCTION CORP. INTERNATIONAL HOTEL CORP. V. JOAQUIN JR. & SUAREZ